Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

India’s ferrous scrap imports declined in June from June 2019 due to a weak finished steel demand in the domestic market amid COVID-19 lockdown.

India imported 296,000mt of scrap in the month, down by 42pc from 510,000 in June 2019. In the April-June period, India registered a fall of 28pc in scrap imports to 1.38mn mt from 1.92mn mt in the prior-year period.


A few major steelmakers turned their focus on billet exports to mitigate the impact of low off-take in the domestic markets and keep their mills running. Mills falling under the Ministry of Micro, Small and Medium Enterprises category, however, took a severe hit due to supply chain disruptions amid the pandemic. Most were forced to cut production of semis and finished steel as they grappled to source raw-material from the domestic market. A lack of workforce and liquidity along with changing lockdown restrictions exacerbated the situation.




In the April-June period, the USA was the major exporter of melting scrap to India with 236,000mt, followed by the UK with 159,000mt, Australia with 98,000mt, and Brazil with 92,000mt. 


Chennai port registered 204,000mt of ferrous scrap in the April-June period. Ferrous scrap which arrived at Mundra port amounted to 165,000mt, 131,000mt at Nhava Sheva, 64,000mt at Vizag followed by 733,000mt at other ports.        


Bullish prices for ferrous scrap

South Africa recently banned exports of ferrous and non-ferrous metallic waste for two months to support their metal industry which is facing the brunt of COVID-19. The ban, market participants believe, could increase imports from the US, UK, Brazil, and Australia into India. Offer levels from these supplier countries are usually higher than those from South African. 

In June, this export ban had little to no impact on prices as demand for ferrous scrap remained subdued. However, as demand starts to pick up, imported scrap prices in the Indian market could inch up soon. South Africa was a preferred country for India due to its quick delivery time. 

Finished steel demand 

Most steel manufacturers expect finished steel demand to recover after the conclusion of the monsoon season. Manufacturing activities and automobile production around the Indian festival of Diwali is expected to rise, with a ripple effect on steel consumption. Government policies and fiscal stimulus could give an impetus to the construction and infrastructure segments, which generate about two-thirds of steel demand. 

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