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India shifts from imported scrap to DRI: conference
The Indian steel market is experiencing a significant shift in ferrous scrap consumption, with imports declining and secondary mills increasing their use of direct reduced iron, according to speakers at the Metal Recycling Association of India (MRAI)’s 2nd International Business Summit held in Bangkok this week.
Recent trends show a decrease in scrap imports due to several factors, including a slowdown in finished steel production related to this year’s general election, higher freight costs, and weather-related disruptions such as extreme heatwaves and heavy monsoons.
In this volatile demand environment, Indian mills have opted for cheaper domestic DRI over imported scrap, as the cost of virgin raw materials, particularly iron ore, has decreased.
"This year, due to its competitive prices over scrap, DRI consumption by secondary steel mills in India has increased from 15-20% to 35-40%. DRI will play a main role in competing with scrap in the upcoming years," Sanjay Mehta, MRAI president and director at trading group MTC, said at the event attended by Kallanish.
He further noted that India’s domestic scrap generation stands at around 30-32 million tonnes/year, increasing by 1mt each year, which will reduce the country's dependence on imported scrap to some extent.
Shravan Aggarwal, director at Guardian Castings, remarked: "Due to reduced finished steel demand in India this year, many integrated steel players have preferred to produce and sell DRI in the open market rather than opting for self-consumption. This has led to increased supplies and reduced prices, negatively impacting the demand for imported scrap."
Looking ahead, as the Indian government focuses on decarbonisation, Nitin Gupta, director at RL Steel & Energy, said: "Because of its [DRI] cost-effectiveness, many Indian companies are planning to either expand their DRI capacities or set up new ones.”
Instead of using thermal coal, which causes pollution, using hydrogen will address the issue of high emissions in DRI production. This means DRI will play a significant role in secondary steel production, making it a more attractive option compared to costlier imported scrap, Gupta added.
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Anonymous
Very good overview of the weekly steel market.
Anonymous