India: Ferrous scrap imports surge up to 38% m-o-m in Jul'24 on rising steel production

India's ferrous scrap imports increased by approximately 38% m-o-m in July, reaching 0.87 million tonnes (mnt) compared to 0.63 mnt in the previous month, according to BigMint's latest data. Scrap imports surged 26% y-o-y from 0.69 mnt reported in July 2023.

BigMint's assessment indicated that imported ferrous scrap prices were relatively high. For example, in July, imported HMS (80:20) scrap from Europe was priced at INR 32,500/tonne ($224/t) at the port, excluding freight charges. In comparison, domestic HMS (80:20) from Jalna was priced at INR 33,200/t ($328/t). After accounting for freight, the total cost of imported ferrous scrap generally exceeded that of domestic scrap.

This increase in scrap imports was largely due to shipments that had been booked back in April, which finally arrived in July. The timing of these shipments created a surge in imports, reflecting the delayed impact of earlier booking decisions.

Scrap imports in 7MCY'24: During the first seven months of current calendar year (7MCY'24), scrap imports aggregated to around 4.74 mnt - marking a sharp decline of 20% compared to 5.94 mnt seen in the same months of 2023.

Country-wise imports in July

• The US led the export rankings with a remarkable 187,558 t, marking a dramatic 58% m-o-m increase from June's 118,748 t and more than doubling its volume annually compared to 89,158 t in July 2023.
  
  
• The UK's exports followed closely, reaching 128,410 t, a substantial 79% m-o-m rise from June's 71,843 t, though it remained relatively stable y-o-y compared to 129,054 t in July 2023.
  
  
• Australia emerged as the third-largest exporter with 67,777 t. This figure represented a 29% m-o-m increase from 52,374 t in June and a staggering 212% y-o-y rise from 21,713 t in July 2023.
  
  
• Poland saw a dramatic leap, exporting 41,703 t, a 109% m-o-m increase from June's 19,932 t, and an 8% y-o-y rise from 38,769 t in July 2023.
  
  
• Bahrain, on the other hand, experienced a notable decline, exporting 50,656 t, a 23% m-o-m drop from 66,195 t in June.
  
  

Additionally, other countries contributed 392,325 t in July 2024.

Grade-wise imports

Heavy melting scrap (HMS): In July 2024, India's imports of HMS scraps - typically the most imported grade, surged impressively by 36% m-o-m, reaching 450,432 t compared to 331,038 t in June. This increase also represents a 31% y-o-y rise from the 344,289 t imported in July 2023.

Despite the notable monthly and annual increases, the overall trend for HMS scrap imports during the 7MCY'24 told a different story. From January to July, imports declined by 16% y-o-y, falling from 2.96 mnt in the same period last year to 2.49 mnt in 2024.

As per BigMint's data, western region steel mills had the largest share of HMS scrap imports, accounting for 29-30% of the total HMS imports to India in July. This regional dominance underscored the importance of the western corridor in meeting India's demand for HMS.

Shredded scrap: In July 2024, imports of mild steel shredded scrap experienced a dramatic surge, soaring 81% m-o-m to reach 205,019 t, up from 113,200 t in June. This also represents a striking 60% y-o-y increase compared to the 128,398 t imported in July 2023.

Yet, the broader picture for shredded scrap imports revealed a different trend. From January to July 2024, imports fell by 29% y-o-y, decreasing from 1.26 mnt in January-July 2023 to 0.89 mnt this year.

Notably, similar to HMS scrap, shredded scrap imports were also predominantly handled by steel mills in the western region, which accounted for up to 33% of the country's total shredded scrap imports.

Light Melting Scrap (LMS): In July 2024, imports of LMS scrap showed a steady rise, climbing 6% m-o-m to 76,960 t from 72,553 t in June. This increase also marked a 27% y-o-y growth compared to 60,799 t imported in July 2023.

Despite this positive trend, the overall picture for LMS imports over the 7MCY'24 revealed a decline. From January to July, imports fell by 23% y-o-y, dropping from 552,000 t in 2023 to 423,200 t this year.

BigMint's data highlighted that - The southern region of India was the largest importer of LMS scrap, accounting for up to 27% of the total LMS imports into the country.

It is noteworthy that India's steel production saw a significant increase in July 2024, rising to 11.32 mnt from 10.43 mnt in June, marking a 9% m-o-m rise. This rise reflects the country's strong demand for steel which has increased the need for ferrous scrap as a crucial raw material.