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India’s Steel Expansion Faces Scrap Squeeze

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Business 12 hours ago Economic Times

 India’s push to expand steel capacity while cutting emissions is running into a growing bottleneck: steel scrap. As producers add more electric arc furnace (EAF) and scrap-based capacity to meet green steel goals, demand for ferrous scrap is rising faster than reliable supply.

The challenge is structural. Domestic scrap collection is still highly fragmented, with limited organised sorting, shredding, and processing. End-of-life vehicles and industrial scrap that could feed cleaner steelmaking are not flowing into formal channels at the required scale, keeping availability tight and costs elevated. At the same time, global scrap supply is getting more competitive, with trade restrictions and shifting export policies in key regions making imports less predictable.

For steelmakers, this means higher input costs, tighter procurement, and greater exposure to volatility—especially for plants planning to increase scrap usage. To bridge the gap, companies and policymakers are ramping up formal recycling networks, investing in scrap-processing capacity, and expanding vehicle scrappage and circular economy infrastructure. In the near term, however, import dependence is likely to increase, making scrap security a central theme in India’s steel growth story.