Indian Ferrous Scrap Imports Hit 3 Years High in April

Arrival of two bulk scrap vessels from the US, low imported scrap prices and restocking ahead of general elections could have resulted in an increase in ferrous scrap imports in April to India

India, world's second largest crude steel producer recorded highest ferrous scrap imports in the last 3 years in April'19. As per recently updated customs data, the country imported 598,870 MT ferrous scrap in Apr'19. Prior to this, the highest imports were witnessed in CY16 April at 638,919 MT. In Apr'19, the imports rose by 3% M-o-M, as against 582,699 MT in March.

After witnessing low imports in the earlier months of Q1'19, scrap bookings could have increased for March-April shipments. The record imports for April delivery could be attributed to the aggressive restocking before the long General Elections from mid-April. It was anticipated that post-election results, steelmakers would actively resume scrap buying, however, the same was not observed on limited domestic support amid the decline in finish steel prices. On the other hand, scrap imports registered a jump of 44% Y-o-Y as against 415,468 MT in Apr'18.

As per price maintained with SteelMint, it is observed that imported scrap prices remained lower this year in comparison to same period last year, thus encouraging steelmakers to opt for imported scrap. During the period of March and Apr'19, Shredded scrap offers to India from Europe and US have remained in the range of USD 330-335/MT, CFR, which was at least around USD 50-60/MT lesser than the prices in Mar-Apr'18 period.

In April'19, two bulk vessels arrived at berth to Indian Port (Kandla) with a total of 64,910 MT of ferrous scrap, against nil volume in the previous month.

According to WSA, Indian crude steel output had increased by 5% in May'19 to 9.2 MnT while it was 8.79 MnT in Apr'19.

Country-wise - UAE remained the largest scrap supplier to India in Apr'19 with a share of 18% as it exported 107,389 MT of scrap, dropping by 17% M-o-M from 129,841 MT in Mar'19. Another top supplier UK witnessed a drop of 13% M-o-M, supplying 94,332 MT in April with 16% of share. Other top suppliers to India were USA (61,819 MT, up 141% M-o-M), Singapore (50,476 MT, up 22% M-o-M) and South Africa (32,160MT, up 47% M-o-M) with a share of 10%, 9% and 8% respectively.