India's ferrous scrap imports to dip by one-fourth on weaker rupee.

MUMBAI: India's ferrous scrap imports are likely to drop by one-fourth essentially on weaker rupee against dollar, lowering steel production and surging usage of cheaper products in making steel.

The country's metal recycling industry expects to buy nearly 3.5 million MTS this fiscal year against 4.5 million MTS in previous year as infrastructure development has taken a hit in various parts of the country due to inflationary problems. Metal recyclers have already started seeing drop in orders from the existing buyers, who purchased large volume in last five years.

Metal recyclers import ferrous scrap, a vital raw material for making steel and cast iron products, mainly from US, UK, UAE, South African and Germany. The $ 200 billion global scrap recycling industry is largely dominated by China and Western world.

"This year will be tough for all of us. We are working under tremendous pressure and seeking duty cuts from the government," says Ikbal Nathani, president of Metal Recycling Association of India ( MRAI).

The recyclers have sought removal of import duty of 5% in order to bear the additional burden other than importing at expensive rate of dollar. Also the import duty levied on the metals recycling equipment and radiation detection equipment make products more expensive in the slack demand season.

The rupee is depreciated by a quarter against the dollar in the last year which is what making the imports more tough. The imported heavy metal scrap is traded at $490 a tonne in Indian ports and there are chances it might go up with the dollar exchange rate rising up.

In order to strengthen domestic production of ferrous scrap, the Ministry of Steel has joined hands with Kolkata-based Joint Planning Committee that will collate data of production and enhance supply in a planned manner to meet most of the infrastructure plans in the country.

Source : economictimes.indiatimes.com