- Indian Rupee hits an all time low of 65.5 per USD
- Ferrous scrap Imports are not feasible
- Domestic scrap and sponge iron are much cheaper than imported scrap
India imported scrap market has remained dull over the past couple of months. Meanwhile, no major deal has been concluded. The imported scrap offers to Indian buyers is stable since past 2-3 weeks.
The imported scrap market in India is not feasible to the importers in any circumstances. No big booking has been commenced in the present month, primarily due to falling Rupee (which crossed 65 level against USD). According to trade sources, offers from US and Europe for shredded scrap stands at around USD 380-385/MT CFR India (in Containers) and HMS 1&2 at USD 335-340/MT from Middle East.
According to provisional custom data, the total amount of ferrous scrap imported to India was 1.2 lac MT from 1 to 14 August '13, which is down by 30% as compared with the same period of previous month (July).
Contrarily in July '13, the total import of scrap increased by 25% M-o-M due to overbooking of scrap from UK and Europe to Indian importers. All the bookings were made in May when Rupee was at 55-57 level.
On the other side, the rupees getting weak against the dollar is yet another hurdle for the Indian importers as currently rupee is touching 65+ per dollar which has squeezed the margin to import scrap. Imports of scrap will move down further as Importer expects rupee to the touch level of 70/USD in near future.
India is the only country in Asia which has levied import duty on raw material after four years of suspension while others have freed the import of metal scrap. According to sources, India's import duty on ferrous scrap may be increased from 2.5% to 5.0% to encourage sponge iron production but it still waits for confirmation from the ministry
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