Scrap imports in India was on an average of about 7 MnT in FY13 from overseas market so the question arises, do we have an alternative?
The new developments in export policy for Scrap from European & African nations have been a news buzz. They are of a notion that cost of steel production in their country is rising and setting embargo on exports, might help in cost corrections. Ghana in South Africa has already stopped exports and the scenario depicts that others are soon to follow.
Hot Briquetted Iron (HBI) is a product with 85-87% Iron i.e. 10% less as compared to Scrap. But, it’s an equally competitive replacement; and might just make its way to Indian ports. In Indian context, with possible decline in Scrap imports one can expect HBI exports from Middle East filling the gap between the demand & supply. Scrap prices in the global market are around USD 390/MT CFR while that of HBI are about USD 383 /MT on CFR basis. Given that the price difference is around 10%, which equalizes the difference in iron content between Scrap & HBI, they can easily serve as an alternative to each other.