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India's scrap imports rose by 15% on-month in May, reaching 0.61 million tonnes after four months of continous decline, as per data accessed by Kallanish. This spike is due to Indian purchasers replenishing between mid-April and early May in anticipation of increased steel demand following the general election on June 4th.
The majority of ferrous scrap that India buys comes from the US, UK, and Europe. Despite a $109/tonne export levy levied by the UAE government, the United Arab Emirates accounted for the largest volume of imports in May. In recent months, India has favoured imports from the UAE over the US and Europe because of the shorter travel times and a notable increase in freight costs from far-off nations.
A recent container supply crunch, caused by peak shipping season, longer transit times due to Red Sea diversions, and bad weather in Asia, surged freight rates. Ocean carriers are skipping or shortening port stops to stay on schedule, exacerbating container shortages.
“The UAE is currently our best option for securing scrap due to shorter lead times and the ability to make need-based purchases. Port congestion and high freight rates following US tariffs on China in early May have made sourcing even from Far Eastern countries like Hong Kong, Malaysia, or Singapore quite difficult for us," states a Mumbai-based scrap trader.
Since the announcement of US tariffs, Chinese manufacturers have advanced their shipments to the largest economy in the world in an attempt to deliver goods before tariffs are applied. On the supply side, weak domestic steel demand in the UAE and other Middle Eastern and North African countries has forced UAE scrap sellers to seek alternate markets such as India and Pakistan.
According to industry participants, scrap exporters are avoiding export duty by filing false statements and taking advantage of lax enforcement. Stainless steel scrap accounted for almost 15% of India’s total May scrap imports, at 0.10 MT. India’s total ferrous scrap imports from January to May totalled 3.95 MT, reflecting a 16% decrease compared to the same period last year.
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