MRAI Business Summit: No sign of slowing down

Driven by steel-intensive urbanization, cyclical economic growth and “green steel” requirements, imported ferrous scrap demand is poised to keep growing in India and the rest of South Asia, according to panelists at the 2023 Material Recycling Association of India (MRA) Business Summit.

A ferrous scrap-focused session at the event, which took place in late August in Bangkok, featured comments from scrap traders, steel producers and global steel industry analysts and observers.

Lee Allen of United Kingdom-based business information company Fastmarkets referred to India as now “clearly the number one importer” of ferrous scrap in South Asia, with its import volumes having surged past those of neighboring Bangladesh and Pakistan.

Allen said shipping industry conditions to India had made bulk shipments preferable in 2022, but that trend was reversed in the first half of 2023, with containerized ferrous scrap shipments gaining favor.

Fellow panelist S.K. Gupta of India-based MSTC Ltd. said some steel producers in that nation who have traditionally relied on iron ore are “thinking of increasing their input of scrap.”

As did panelists in another MRAI Business Summit session on stainless steel, Gupta pointed to automotive and appliance OEMs as requesting recycled-content metal.

While Allen predicted India’s steel industry will need 6 million metric tons of imported scrap by 2030—which represents significant growth—Gupta said that prediction may be low. Gupta said an import figure of from 10 to 12 million metric tons per year was possible by 2030.

Aameir Alihussain of steel producer BSRM in neighboring Bangladesh says that country likewise is poised to need more imported scrap. Alihussain said more electric arc furnace (EAF) steel capacity is coming online, and Bangladesh’s sizable ship dismantling sector is able to generate just 10 percent of the scrap such mills need. “We will need to keep importing,” he stated.

Representing Pakistan, Osama Nadeem of trading firm Better Deals said producers in South Asia and Southeast Asia are gaining global steel market share in part at the expense of Turkish EAF mills. Pakistan in particular can help absorb scrap that used to head to Turkey, he remarked, because “we are dependent on scrap,” with the nation devoid of direct reduced iron (DRI) and hot briquetted iron (HBI) plants.

Allen predicted ASEAN countries (the Association of Southeast Asian Nations, which includes Malaysia, Thailand and Indonesia) will need more than 10 million metric tons of imported ferrous scrap by 2032. That nation’s scrap demand outlook is muddled, however, by what Allen called “massive investments by Chinese companies” in the region in iron ore-based blast furnace facilities.

In 2011, said Allen, 95 percent of the ASEAN region’s steel capacity used scrap-fed EAF and induction furnace technology. By 2032, if all planned Chinese blast furnaces come online, that figure could drop to 36 percent.

Nonetheless, based on overall increased EAF capacity in South Asia and recently in Japan, “We see scrap shortages in the future” in Asia, said Allen.

The MRAI 2023 International Business Summit was August 21-22 at the Marriott Marquis Queen’s Park in Bangkok.