India’s demand for scrap remains strong
Demand for imported scrap and paper remains strong in countries of the Indian subcontinent, which include India itself and several neighboring countries, with Pakistan and Bangladesh being the most important.
The region has been beset by waves of coronavirus infections and workplace restrictions that have sometimes combined in 2020 and 2021 to make India’s still-developing transport and logistics infrastructure even more frustrating than ever. ‘habit.
Delays and hassle aside, the numbers show that metal producers in India, Bangladesh and Pakistan remain keen to convert scrap metal into secondary metals that go into transportation and construction products that contribute to the steady growth of the product. gross domestic (GDP) in the region. Likewise, recovered fibers shipped overseas are consumed vigorously by Indian paper and board producers.
Obstacles to overcome
As COVID-19 hit the world stage in the spring of 2020, India grabbed the headlines for the swift and comprehensive traffic restrictions adopted by the government of Prime Minister Narendra Modi.
Importers and exporters of waste products were among those who had to wait a long time to complete the necessary paperwork and move materials from an incoming container to its final destination. The resulting financial hassles, such as demurrage charges, have been the subject of petitions and lawsuits.
During the remainder of 2020, the situation in India improved and scrap started to flow into the subcontinent again. However, COVID-19 was not done with India, with the spring of this year seeing a considerable spike in cases that resulted in more restrictions on workplaces and movement of goods.
In mid-September, an Asia-based non-ferrous trader said Recycle today, “Indian imports of scrap metal proceeded, as usual, without any customs clearance. He added, “With the cases of COVID having become considerably weaker, industrial activities are at their peak, with the scarcity of raw materials pushing buyers to buy in the domestic market. “
The trader also mentioned two recurring issues that may threaten the flow of scrap metal to India: the maneuvers of primary metal producers to erect barriers to importing scrap metal (to help protect their own business); and the efforts of the largest Indian companies, in cooperation with the government, to manage the flow of domestic scrap metal to serve these established companies.
The transfer of domestically produced scrap to larger scrap yards run by multinational companies could indeed increase the overall level of metal available to domestic producers. However, in a country where a large army of scavengers tend to find anything of value that is discarded, some observers say it is more likely that a greater volume of metal will be officially registered as recycled rather than traveling leisurely from a hawker to a small cast-iron store.
Investments in scrap processing infrastructure include a 500,000 tonne per year facility commissioned by Tata Steel in Rohtak, India in the north of the country.
“Scrap metal recycling ensures that the circular economy loop is closed,” said Yogesh Bedi, head of Tata’s steel recycling business, when the facility opened this summer. The scrap produced at the facility, which has a shredder and baler, carries the Tata FerroBaled and Tata FerroShred brands, the brands being designed to “give a distinct identity to the scrap processed and ensure a product of high quality. standardized quality for the customer and simultaneously raising the bar for the scrap metal industry, ”said Bedi.
Indian primary aluminum producers often appear to be lobbying to raise taxes and introduce strict restrictions on imported scrap to avoid competition from secondary scrap-fed producers.
While these efforts may create obstacles, Indian producers of recycled content metals (and those in neighboring Pakistan and Bangladesh) have not ceded to primary producers.
By the numbers
One of India’s largest secondary aluminum producers made the news at the end of September, filing documents with a regulator to raise funds through an Initial Public Offering (IPO).
India-based secondary aluminum producer in Faridabad, CMR Green Technologies, formerly known as Century Metal Recycling, said the proceeds from the early IPO would go to “debt payment and general purposes of the company ”.
The chief executive of the company, Mohan Agarwal, is a strong advocate for the production of metals with recycled content. At the 2020 meeting of the Materials Recycling Association of India (MRAI) near Delhi in February of the same year, he told delegates: “Scrap metal is the future and recycling”.
He made the statement while acknowledging that the Indian government sometimes imposes high tariffs on imported scrap aluminum, often influenced by lobbying from the country’s major aluminum producers. (MRAI was formed in part to provide a lobbying counterweight to defend the interests of producers of metal, paper and other scrap materials.)
Despite the continued placement of such hurdles, CMR Green Technologies has grown to operate 12 manufacturing plants, four of which involve joint ventures with Japanese companies Toyota Tsusho Corp. and Nikkei MC Aluminum.
On the export side of the equation, statistics collected by the United States Census Bureau and aggregated by the US Geological Survey (USGS) show that the scrap metal trade between the United States and the Indian subcontinent remains strong.
A portrait of the demand for recovered fibers in the region can be found in a recent Recycle today Profile of Khanna Paper, based in Amritsar, India. The company consumes approximately 600,000 metric tonnes of recovered paper each year from the four paper machines on its 80-acre campus.
Khanna Paper is a regular consumer of recovered fiber imported via inbound shipping containers. Saurabh Khanna of the company said Recycle today this spring, “We had 50 containers per month when we started, and now we have over 1,000 containers per month. We have seen year-over-year growth and had to hire people because of that in 2019. ”
The volume of scrap exported from the United States to India, Bangladesh and Pakistan (combined) was almost identical in the first half of 2021 compared to the first six months of 2020. About 1.265 million metric tonnes were shipped during of the two periods.
Bangladesh is the largest buyer in the ferrous sector, purchasing 622,000 metric tonnes, or 49%, of the three countries’ total. India followed with 332,000 metric tonnes (26%), followed by Pakistan, which received 311,000 metric tonnes (24.5%).
This year, the three countries each rank among the top eight destinations for outbound scrap. Apart from its USMCA (United States-Mexico-Canada Agreement) partners with land borders, Bangladesh is the fifth destination, India is the seventh and Pakistan is the eighth.
When the appetites of the three nations are combined, their 1.265 million metric tonnes in the first half of 2021 lags behind Turkey alone as an overseas destination (and also behind Mexico, with its land border).
Figures published on the USGS website show that CMR Green Technologies is far from alone in the region in terms of importing scrap aluminum. During the first half of this year, India imported 169,000 metric tonnes of aluminum scrap, and Pakistan imported another 8,100. India’s volume places it behind Malaysia as a buyer of aluminum scrap exiting the United States. (And a government agency in Malaysia might be on the verge of making shipping scrap metal to that country much more difficult.)
In early October, fears of a coal shortage strained India’s industrial sector. Beyond that, if India and its neighbors are able to enjoy steady economic growth, American processors and traders of much waste appear poised to keep the Indian subcontinent at the forefront of their trade plans. international for several years to come.