The Hindu Business Line : Importers move to look for shredded steel

With scrap prices gradually inching up, the prices of ingot have increased by Rs 1,000-Rs 1,200 during the last few days, according to industry sources.

Market sources said companies such as Rathi Steel, Kamdhenu Ispat, Barnala Steel, Bhabani Rolling Mills, Mahamaya Rolling Mills that are considered to be significant players in their respective markets have sounded out that prices would be increased.

"Rathi has already increased their prices by around Rs 500-Rs 600 and others too are expected to do the same soon," traders said.

In the international market, sellers have started charging higher prices for scraps ordered by Indian buyers.

This is because though Indian buyers are continuing to book orders, though in much smaller quantities than two weeks ago, they are mentioning specifically that the scrap should not originate from West Asia and CIS countries.

Also, Indian buyers are now showing preferences for shredded scraps instead of their earlier preference of unsorted/mixed scraps.

Unsorted/mixed scraps contain everything and are the cheapest variety available while shredded scraps mostly originate from cutting automobiles and other lighter machineries.

Heavy melting scraps originating from ship-breaking and heavy machineries is a little more expensive while re-rollable scraps originating from the steel plants are the most expensive varieties available but few Indian importers go for them.

Since the prices of the raw materials have started shooting up, the re-rollers, who account for almost 75 per cent of the long products market, have started increasing their prices.

Scrap is used mostly by the electric-arc furnace units for making ingots.

The ingots are then rolled into various long products like re-inforced bars and structurals by the re-rollers.

Last year, India imported around 1.5 million tonnes of steel scraps and according to official estimates, this year it is expected to be around 2.2 million tonnes.

To facilitate higher imports, the Government recently brought down import duty on scraps from five per cent to zero per cent.

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