India's 2020 ferrous scrap imports fall 22% to 5.48 mil mt as pandemic curbs demand

Singapore — Ferrous scrap imports by the world's second-largest crude steel producer India fell 22.4% year on year to 5.48 million mt in 2020, latest commerce department data showed.

The UAE remained India's largest supplier in the year, accounting for 15.1% of its total imports at 829,581 mt, down 28% from 2019, and the US 12.4% of the total at 679.897 mt, down 11.4%, the data showed. The UK was the third-largest supplier at 588,401 mt, down 32.3% year on year.

However, volumes from Brazil rose 111.8% on the year to 216,640 mt in 2020 and from Japan rose 55.5% over the same period to 72,885 mt.

India imposed a series of lockdowns to contain the coronavirus pandemic in 2020 that took a toll on the nation's economy and impacted its construction and manufacturing activities, reducing steel demand.

Ferrous scrap imports were the lowest over April-July, with the exception of May, when pre-sold cargoes were rushed in, as the Indian market grappled with cancellations and shipment postponements prompted by the nation's initial lockdown in March.

Buyers were even heard refusing to accept shipments amid mills shuttering and complications caused by the lockdown such as port and trucking limitations.

Even after the movement restrictions were eased from June, traders remained wary due to cashflow and payment issues with smaller steelmakers, which resulted in cargoes being redirected to other buyers.

Additional supply pressures emerged after India's largest supplier of scrap, the UAE, imposed a four-month ban on exports on ferrous scrap from May 15 to ensure its domestic steelmakers had sufficient supply amid the global pandemic.

This prompted India to seek supply from other origins, particularly South America, Japan and the US.

However, the UAE's ban was not strictly enforced and UAE volumes continued to flow to India, although at a lower volume. India's imports from the UAE averaged 46,000 mt/month over June-September, down from 70,000 mt/month over the same period a year earlier, the data showed.

India's demand for ferrous scrap had been the hot spot in Asia in 2019, when it overtook South Korea to be the region's largest importer. India imported 7.05 million mt of scrap in the year, surpassing South Korea's 6.5 million mt.

The impact of the pandemic in 2020 was also reflected in India's crude steel production volumes, which fell 10.6% year on year to 99.57 million mt, behind China's output of 1.05 billion mt., according to the Worldsteel Association.