Indian steel mills at only half capacity

India’s economy, including the country’s scrap recycling sector, continues to be gripped by the coronavirus pandemic, according to experts on an online panel hosted by the US Institute of Scrap Recycling Industries (ISRI).

Steel scrap demand is on the rise again but remains far below pre-Covid-19 levels, cautions Zain Nathani of Mumbai-based Nathani Group, a major ferrous recycler and trader. ‘With the construction and automotive sectors still operating at half strength, steel mills are operating at only 40-60% of their capacity,’ he explains. On the supply side, Nathani is seeing lower volumes coming in ‘with the construction industry generating fewer scrap materials.’

More two-wheelers to come 

On a positive note, Nathani believes a revival in two-wheeler vehicle production – which is huge in India – will boost scrap demand in the longer term. Another good sign is India’s ‘strong financial sector,’ he adds.

Scrap market analyst Sean Davidson of Davis Index, too, foresees an increase in more investments in construction, infrastructure and agriculture. ‘Obviously, this will boost production of machines and materials, which I expect will further push up scrap demand in the next two to three months,’ he says.

India’s scrap recyclers, united in the MRAI trade body, have urged their government to develop recycling policies to boost the sector. ‘Government support is crucial, especially now,’ stresses Nathani.