COMMENT: Indian local scrap use constrained despite rise in crude steel output

In contrast to the clear skies outside, a cloud hung over discussions among Indian scrap traders attending the opening session of the annual conference of the Material Recycling Association of India (MRAI) earlier this month in Kochi, southern India.

Secretary-general Amar Singh praised the superior air quality in the host city, compared with the metropolises of New Delhi and Mumbai. But delegates in the event venue, the Grand Hyatt Bolgatty, could detect a whiff of uncertainty, with scrap use in the country flatlining. Even the rise in global scrap prices earlier this month has struggled to breathe new life into the Indian markets. India’s crude steel output rose by a cumulative 5.5% year-on-year in the first 11 months of 2018, according to the World Steel Association (WSA). But this increase was mostly driven by a 7.3% rise in steel production from integrated basic oxygen furnaces (BOFs). Despite the steel production increase, the use of scrap in India fell by 1.4% in January-November to around 11 million tonnes, according to Fastmarkets research, with increased use of alternative raw materials. For the domestic scrap sector, the picture has been even gloomier, with Fastmarkets’ estimates indicating...

Published

Lee Allen

February 26, 2019

16:30 GMT

London