India's scrap imports fall to 2.5 million tonnes in H1 2026, a five-year low

en.Wedoany.com Reported - At the BigMint India Ferrous Week 2026, held from August 19 to 21, 2026, in Kolkata, industry representatives discussed shifts in the global scrap trade landscape, covering topics such as tightening supply, changing trade routes, freight uncertainty, and the evolution of India's procurement strategy. Participants generally agreed that the global supply of tradable scrap is contracting, with traditional exporting regions tightening policies, and that India needs to strike a balance between expanding domestic recycling and maintaining import flexibility.

The panel session was moderated by Jayprakash Sahu, Managing Director of BigMint, with participation from Arshdeep Singh, Director of Vital Solutions; Amit Goel, General Manager of Scrap Procurement at Jindal Stainless; Himanshu Shrivastava, Head of Operations and New Projects at Tata Steel Recycling Business; and Rohit Agarwal, General Manager of JSW Steel.

Regarding global scrap supply, Arshdeep Singh noted that final trade data for 2025 is still being compiled, but the overall trend indicates that the international supply of tradable scrap is declining. The United States and Europe, which together account for more than half of global seaborne scrap exports from major suppliers, are increasingly retaining scrap for domestic use. In the US, exports have declined as new electric arc furnace capacity absorbs more scrap; Europe plans to implement stricter export regulations starting in 2027. Alternative supplier countries such as Japan, Mexico, and Singapore may fill part of the gap, but these markets themselves face pressure from rising domestic demand and new capacity additions.

India's scrap market is characterized by declining imports but rising consumption. Domestic scrap supply has increased to approximately 20 million tonnes, while imports fell to around 2.5 million tonnes in the first half of 2026. BigMint market analysis shows that India's scrap imports hit a five-year low in H1CY'26, as a widening spread between imported and domestic prices, along with increased use of direct reduced iron (DRI), reduced the attractiveness of overseas scrap. Amit Goel stated that this is a price-driven market—if imported scrap is competitive, Indian mills will buy it. He noted that the spread between imported and domestic scrap has in some cases widened to around 4,000 to 5,000 Indian rupees per tonne. Indian mills have consequently increased their use of domestic scrap and DRI, while formalization of recycling, Goods and Services Tax (GST) compliance, and greater visibility of unorganized scrap have boosted reported domestic scrap supply.

Drawing on Tata Steel Recycling Business practices, Himanshu Shrivastava pointed out that India's challenge lies not in the absolute supply of scrap, but in bringing the vast recycling network—spread across scrap dealers, automotive clusters, and industrial hubs—into an organized system. He said that if buyers can purchase on suitable terms and give the market confidence, volume is not an issue. India still has significant room to improve recycling efficiency, and greater formalization, better aggregation, and improved processing infrastructure can channel more scrap into the organized supply chain. End-of-life vehicles are seen as a future growth area, with investments in registered vehicle scrapping facilities and an expanding manufacturing base potentially significantly increasing long-term domestic scrap supply.

Japan has emerged as one of the important alternative supply sources for Indian buyers, but the panel cautioned against assuming that Japanese scrap will automatically fill the gap. Japan's exports have increased in recent years, but neighboring markets such as Vietnam, Bangladesh, South Korea, and Taiwan remain strong competitors due to geographic advantages and established procurement patterns. Arshdeep Singh noted that Indian buyers recognize the quality of Japanese scrap, but commercial viability is the deciding factor. The panel also discussed alternative sourcing opportunities in Singapore, Malaysia, the Philippines, and Australia, but each market has its own limitations. Several traditional exporting regions are building new EAF capacity, and future export supply may tighten further. If Europe and the US become less accessible, India cannot rely on a single alternative source.

Freight is becoming a strategic component of India's scrap procurement, accounting for about 20% of landed value. Red Sea disruptions, longer shipping routes, vessel shortages, rising insurance costs, and geopolitical risks have pushed up transportation costs and volatility. Arshdeep Singh also noted that the large volume of global vessel orders accumulated after the pandemic could create overcapacity once they enter the market. For Indian buyers, maintaining flexibility between containerized shipping and bulk cargo procurement is advisable.

On procurement strategy, Amit Goel argued that different steelmakers require different approaches: integrated steel producers, for whom scrap accounts for a smaller share of metallic feedstock, may prefer to secure stable long-term supply at slightly higher prices; large trading companies with captive steelmaking operations also prioritize supply chain security; smaller secondary steel producers are better suited to being flexible spot buyers. Scrap prices are ultimately determined by the finished steel market in a reverse calculation. Regarding investments in overseas scrap processing facilities, the panel generally agreed that integrated steel producers and large companies could selectively benefit from joint ventures or investments, as such facilities can provide better control over quality, volume, and supply consistency. However, due to capital requirements, logistics costs, and operational risks, overseas integration is not suitable for all buyers, and small and medium-sized mills could first strengthen domestic recycling and processing capabilities. A key point of discussion was that direct mill supply requires strict quality and size specifications, whereas processing facilities can handle a wider range of scrap and convert it into usable scrap, so strengthening supply chain control can enhance procurement security.

Rohit Agarwal emphasized that the formal segment of India's domestic scrap market is estimated to account for about 75% to 80%, with the remaining 20% to 25% still informal, and that scrap recycling efficiency is around 75%, indicating room to bring more scrap into the formal system. His experience with Tata Steel's scrap recycling projects shows that the key challenge is not necessarily supply volume, but building an efficient collection network and giving suppliers confidence through suitable procurement terms. The current decline in imports is primarily driven by price competitiveness—imported scrap is about 4,000 to 5,000 Indian rupees per tonne more expensive than domestic scrap, giving mills a clear incentive to source locally. However, imports will continue to play a role; if global prices become competitive and the spread narrows, buyers can quickly shift back to imports, reflecting the flexibility of India's procurement market rather than a structural decoupling from imports.

The session concluded that India's scrap strategy needs to balance strengthening domestic supply with maintaining import flexibility. The discussion noted that India's domestic scrap demand is projected at approximately 62 million tonnes in fiscal year 2030 (FY'30), with supply of around 47 million tonnes, leaving a gap that will still need to be filled by imports. India's scrap security will depend on the maturity of its recycling system, quality infrastructure, freight flexibility, and supplier relationships, enabling buyers to switch between domestic and imported metallic feedstock as market conditions evolve.