In 2023, India’s ferrous scrap imports touched an all-time high at 11.05 million tonnes, a 42% increase from the previous year. However, January 2024 witnessed a slowdown, with imports declining 24% month-on-month to 0.97mt, Kallanish notes.

The higher scrap imports in 2023 can be attributed to India’s increased steel production and the growing importance of scrap usage in steel manufacturing.

In 2023, India produced 140mt of crude steel, up 12% year-on-year, according to worldsteel data. Steel production by electric furnaces – using scrap and sponge iron – rose by 13% y-o-y to 77mt.

India’s scrap consumption rose 12% y-o-y to 29mt in 2023. Nevertheless, with decreased domestic scrap generation and lower demand from scrap-consuming nations such as Turkey, Pakistan, and Bangladesh, foreign scrap was redirected to India at competitive rates, resulting in a surge in imports.

The US (19%), UK (17%), and EU (8%) are the primary suppliers of scrap to India, accounting for around 45% of the total volume.

In January, India’s ferrous scrap imports fell following ample bookings in October-December 2023, which resulted in sufficient availability at steelmakers.

Moreover, a downturn in the global steel market in late December led to minimal bookings by Indian buyers for January-arrival shipments.

"Overall demand in the rebar market has been sluggish in recent weeks. While domestic scrap availability has improved, and sponge iron prices remain competitive, we haven't been considering booking imported scrap," says a rebar producer in eastern India.

In January, United Arab Emirates, the US and UK were the top suppliers of ferrous scrap to India. State wise, Gujrat, Maharashtra and Punjab were the largest importers.

Market participants have indicated that India's scrap imports may experience pressure in the near term due to subdued demand from end-users ahead of the upcoming general elections.