India's bulk scrap imports hit a fresh high in Dec'22

India's bulk ferrous scrap imports hit a new high of 462,561 tonnes (t) in December 2022. Volumes rose by 2% m-o-m compared to 454,078 t in November. Lower bulk scrap prices compared to containerised material, the absence of Turkiye from the global seaborne market, and domestic scrap shortage kept Indian buyers active in the import market.

Increasing preference for bulk vessels among Indian buyers over containers boosted scrap imports in the last four months of 2022. Chennai, a major auto hub, remained a prominent destination for bulk scrap vessels in India, followed by Kandla.

Overall, imported bulk scrap stood at 1.6 mnt in CY22. Interestingly, India witnessed the highest scrap imports in the last six years, according to data maintained with SteelMint since 2017.

Overview of suppliers' market

• Major exporter: A total of 462,561 t had been reserved by suppliers in December. Major suppliers were the US (285,765 t), followed by the UK at 79,500 t. The Netherlands, Sweden, and Venezuela supplied small quantities.
  
  
• Grade wise: Major mills usually prefer high-grade material from the US and UK, with a yeild rate of typically 94%. Mills imported around 265,393 t of shredded material, whereas another 197,168 t was heavy melting scrap (HMS).
  
  

Buyers' market overview

• Major buyers: Chennai-based mill Suryadev booked a total of around 43,010 t of scrap from the US and another Chennai-based mill, Kamachi, booked 38,000 t from Sweden. Meanwhile, prominent western India-based steelmaker, AM/NS India, booked 30,000 t of UK-origin material for its Hazira-based steel plant. This is the second bulk cargo bought by the company after September. Other mills booked small parcels.
  
  
• Major ports: The Indian port to receive the largest volume of bulk scrap imports was Chennai in south India. The mills there were active in booking bulk cargoes. Chennai is the major supply market in the southern region. Mills there mainly follow the secondary steelmaking route, using scrap and sponge iron as basic raw materials.
  
  

Chennai also accounts for nearly 60% of the country's automotive sector and has the biggest share with 35% of revenues.

Furthermore, another prominent bulk scrap destination was Kandla in western India, which sourced sizeable volumes for automotive production.

Imported scrap cost-competitive: The landing cost of imported ferrous scrap is lower than that of domestic material. With the delta between imported and domestic having widened, traders are finding it advantageous to take positions on the former, which will be delivered a couple of months later.

Moreover, prominent bulk cargo buyer Turkiye was absent from the market due to a sharp hike in electricity tariff and limited demand from the domestic and overseas steel markets. Hence, steel production slowed down in the country impacting scrap imports.