- Turkiye-led scrap pricing reshaping South Asia
- Decarbonisation, CBAM to structurally lift scrap intensity
The second day of IMRC-MRAI 2026 in Jaipur featured two closely linked sessions that together captured the evolving reality of India’s steel market and the global ferrous scrap landscape. Industry leaders from steelmaking, recycling, and trading discussed how strong domestic fundamentals are increasingly colliding with tighter scrap availability and shifting global trade flows.
Indian steel and scrap market scenario
The opening session examined India’s steel and scrap market fundamentals amid rising capacity utilisation and the industry’s gradual transition toward greener production routes. Panellists noted that finished steel prices are projected to average INR 51,500-52,500/t in Q1 2026, supported by stronger buying ahead of the financial year-end.
This demand recovery has translated into higher production levels. As per session data points, India’s crude steel capacity utilisation averaged around 82% in 2025, rising sharply to 84% in December from 81.5% in November, improving mill operating leverage and supporting margins.
Panellists also discussed mill economics, noting that margins are assessed through a comprehensive cost model covering both variable and fixed components. Variable costs include PLV, MCC, FOB Australia premium HCC prices, iron ore, shredded scrap, natural gas, and electricity, while fixed costs span labour, maintenance, overheads, depreciation, logistics, and material handling.
Cost pressures were evident as FOB Australia premium PLV HCC prices averaged $212/t in December, up 6% m-o-m from $200/t in November.
Rohit Agrawal (JSW Steel) emphasised that despite healthy demand, scrap availability remains the most critical bottleneck for India’s steel ecosystem. India currently imports nearly 25% of its scrap requirement, and even if this share remains unchanged, absolute imports could rise to 18-20 mnt by 2030 as capacity expansion and green steel projects scale up.
Sanjay Mehta (MRAI) highlighted the structural challenge at the scrap collection level, noting that without organised collection systems, wider adoption of digital payments, and stronger enforcement of EPR norms, domestic scrap availability will remain constrained despite rising demand. He acknowledged positive policy intent through measures such as vehicle scrappage, GST rationalisation, and the e-recycling framework, but stressed that effective execution will be decisive.
Agrawal also mentioned that a significant share of Indian scrap originates from households, waste pickers, and small workshops, making formalisation at the collection level essential to scaling domestic supply. JSW Steel currently procures 40,000-50,000 t of ferrous scrap per month, or around 0.5 mnt annually, but its external scrap requirement alone is expected to exceed 2.5 mnt by 2030, particularly as new green steel capacities come online.
He further outlined India’s multi-pathway decarbonisation strategy, spanning solar, wind, nuclear power, and green hydrogen. Green hydrogen-based DRI was highlighted as a key enabler, allowing blends of 30-40% scrap with 60-70% green DRI, aligned with global decarbonisation expectations. With India targeting 180-200 mnt of steel production and 50 mnt of exports by 2030, routing even 20% of output (around 14 mnt) through green routes would materially lift scrap demand.
Processing capacity also featured prominently in the discussion. Scrap requires shredding, shearing, or baling before use, and large processing facilities of around 0.5 mnt capacity have already been announced in Koppal and Chennai.
Panellists, however, stressed the need for clean-industry incentives and indigenisation of processing equipment, much of which is still imported.
VR Sharma (Jindal Steel) underlined that India’s long-term steel growth story remains intact, but expansion must be balanced with decarbonisation. He noted that DRI- and EAF-based routes will gain importance, while coal-based routes are likely to face rising regulatory and cost pressures over time.
From the secondary steelmaker’s perspective, Yashraj Peety (SRJ Peety Steel) said challenges are more immediate. Fluctuating scrap prices and tight working capital directly influence day-to-day production decisions, and the green transition must remain commercially viable for smaller and mid-sized mills, not just large integrated producers.
Ferrous scrap market outlook – 2026
The second session shifted focus to global ferrous scrap dynamics and their implications for India and South Asia over the next two years, with panelists highlighting structural changes in pricing behaviour, trade flows, and the growing influence of decarbonisation policies.
Zain Nathani (MRAI) highlighted a clear decoupling between Turkish and South Asian scrap prices since late 2025. Historically correlated, the two markets are now moving independently due to aggressive Turkish bulk buying. Turkiye is currently paying around $375/t for HMS and nearly $395/t for shredded, price levels that India and Bangladesh struggle to absorb given weaker finished steel margins. In contrast, containerised scrap into India continues to trade closer to $345-355/t, widening the price gap.
Jawed Ahmed (Al Qaryan Group) explained that strong Turkish demand has diverted US West Coast bulk cargoes away from India and Bangladesh. As a result, Turkish prices are becoming increasingly irrelevant as a benchmark for South Asia, strengthening the case for region-specific scrap indices rather than reliance on Turkiye-led pricing.
From a regional perspective, Sanjoy Ghosh (BSRM Group) said scrap demand in Bangladesh remains subdued amid weak steel prices, intense competition, and upcoming elections. Many infrastructure projects have been stalled for over a year, making mills cautious buyers. However, he noted that once elections conclude and development activity resumes, steel and scrap demand could rebound sharply. He cautioned that the domestic scrap supply will remain insufficient, keeping import dependence high across South Asia.
Panellists agreed that the current environment is putting significant pressure on scrap buyers in India, Bangladesh, and the wider South Asian region, as these markets are unable to absorb a 20-25% premium in scrap prices due to limited support from finished steel prices. This imbalance is expected to persist over the next few months in the absence of a major demand catalyst.
On the supply side, Asian markets remained relatively quiet, with Vietnam subdued and Bangladesh inactive, while cargoes from nearby regions such as Japan, Australia, New Zealand, Hong Kong, and Singapore were largely sufficient to meet current demand.
However, panellists noted that if steel demand strengthens into 2026, buyers may need to accept higher stockpile prices, even as manufacturers could still maintain margins in an improving steel market.
The discussion also covered CBAM and the EU waste shipment regulation, scheduled to come into force in the coming years.
Nathani noted that India sources only around 20% of its ferrous scrap from the EU, limiting near-term disruption. Large Indian mills such as JSW, Jindal, and Tata Steel have already obtained green steel certifications and are participating in green hydrogen projects under the Ministry of Steel, indicating improved preparedness.
CBAM was widely viewed as a carbon pricing mechanism rather than a trade barrier, with potential costs estimated at $40-60/t likely to drive stronger emissions accounting, transparency, and carbon tracking across the global steel trade. Panellists agreed that much of the early concern around CBAM has eased, as manufacturers, recyclers, and traders have been preparing for these changes over several years.
Keyur Shah (Mono Steel India) added that decarbonisation requirements will inevitably push scrap usage higher, even as mills continue to explore alternatives such as DRI and HBI. In the near term, reliance on containerised scrap limits scalability for large-volume buyers, and India may need to move closer to bulk scrap pricing to remain competitive.
On regulatory risks, Ghosh noted that the EU waste shipment regulation, rooted in earlier environmental frameworks, will require stronger traceability, compliance, and proof of responsible recycling practices. Whether South and Southeast Asian markets face tighter supply will depend on their ability to secure exemptions. Failure to meet compliance standards could sharply reduce EU-origin scrap flows to India, Bangladesh, and Vietnam.
Outlook
Panellists concluded that while near-term conditions remain volatile and largely outside regional control, structural scrap tightness, decarbonisation pressures, and shifting global trade flows will increasingly define the ferrous scrap market through 2026 and beyond. Buyers were advised to maintain stable supply relationships, optimise sourcing routes, and prepare for a market where regional pricing behaviour matters more than global benchmarks.
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