India's stainless steel scrap imports dip slightly in Apr'24 amid higher imports of finished products
...
In April 2024, India experienced a minor decrease in stainless steel (SS) scrap imports, with data from BigMint showing imports of 82,371 t. This reflects a 3% decline from the previous month's 84,649 t. Similarly, compared to the previous year, SS scrap imports saw a significant 11% decrease, down from 92,355 t.
SS production in April
India saw a slight decline of 3% m-o-m in the overall production of stainless steel in April, reaching 270,000 t compared to 278,000 t in March. Finished flats production constituted 192,000 t, while finished longs made up the remaining 78,000 t.
Grade-wise imports
In the scrap import segment in April, shipments of Zurik grade remained relatively stable at 18,271 t, while non-Zurik cargoes witnessed a 4% m-o-m decrease, totalling 64,100 t. There was a notable 20% decrease in imports of 400 series, dropping from 15,701 t in March to 12,606 t. Similarly, imports of 300 series witnessed a 2% decline, settling at 52,931 t compared to the previous month's 54,171 t.
Country-wise shipments
According to country-wise shipment data, the United States retained its position as the leading exporter of stainless steel scrap to India, although shipments decreased notably by 13% to 15,449 t in April. South Korea and Thailand followed, with shipments of 5,982 t (up 4%) and 8,145 t (up 25%), respectively.
Additionally, imports from countries such as Malaysia and Turkiye experienced significant declines of 37% and 40% respectively, contributing to the overall decrease in imports.
Why scrap imports remained below expectations?
- Surge in finished, semi-finished imports
Despite the slight 3% decrease in India's stainless steel production in April there was a surge in imports of semi-finished and finished stainless steel products during the period.
India imported approximately 0.70 mnt of stainless steel slabs from January 2023 to April 2024, which significantly impacted scrap requirements.
India imported around 94,020 t of stainless steel finished products in April compared to the previous month's 65,888 t, marking a notable 43% increase m-o-m, thereby further affecting scrap imports.
- Influx of cheaper imports
Moreover, the influx of cheaper finished stainless steel products such as hot rolled (HR) and cold rolled (CR) coils further impacted SS scrap imports. These imported finished products resulted in reduced domestic production and decreased demand for imported scrap.
- Preference for domestic scrap
Major stainless steel producers are increasingly favouring domestic scrap over imported due to price volatility, trade disruptions, and logistical challenges. Europe's domestic mills maintaining higher buying prices have resulted in reduced scrap supply in the export market.
- Fluctuating nickel prices
In April, LME nickel prices surged to $18,452/t, marking a 6-month high and a 4.5% m-o-m rise from the preceding month's average of $17,657/t.
Rising nickel prices stem from constrained Indonesian ore supply, ongoing US and UK sanctions on Russian exports, and bans on sales at LME and CME. INSG's lowered production forecast aligns with robust demand for nickel, vital in stainless steel and EV batteries, amid speculation of Chinese stockpiling to address potential shortages.
These factors put upward pressure on imported scrap prices in April.
Outlook
Expected expansions in crude steel production via blast furnace route, like Jindal Stainless' 0.84 mnt capacity enhancement, will lessen scrap dependency. Anticipated additional capacity by FY'25 could further reduce reliance. Additionally, a recent allocation of INR 1,900 crore aims to expand downstream processing lines in Jajpur, Odisha, supporting increased melting capacity. Scrap import volumes are likely to remain stable, especially amid continued imports of finished material.
