MRAI 2024: Hurdles on the track to progress

Growth prospects seem positive for the production of carbon steel and stainless steel in India, but makers of the metals also point to hurdles that will have to be cleared for those prospects to come to fruition.

Panelists and presenters at the 2024 Material Recycling Association of India (MRAI) International Material Recycling Conference in Kolkata, India, in late January provided some encouraging growth figures while also acknowledging some warning signs.

While steel output and ferrous scrap consumption figures have been rising for several years in India, Bangladesh and Pakistan, Sanjoy Ghosh of Bangladesh-based BSRM Steel said his nation's consumption of ferrous scrap fell by about 10 percent in 2023 because of foreign exchange issues in Bangladesh.

Although no Pakistani steel representatives spoke, that nation also has had difficulties maintaining its level of United States dollars to make overseas purchases.

Ghosh expressed optimism that in his nation, “2024 will be better than 2023.” He also was among the panelists who referred to the region as being a “price-sensitive market,” meaning it is less likely to offer a premium for recycled-content steel.

As delegates gathered in Kolkata, attacks on commercial shipping in the Red Sea south of the Suez Canal were the source of further disruptions in the ferrous market, including lengthy delays and rising sea freight rates. Two panelists indicated India-based buyers of scrap materials in the meantime may look more toward Australia and Japan as a way of avoiding the Suez trade route.

Guest speaker Lee Allen of business information services provider Fastmarkets said several nations in Asia are expected to see large increases in consumption of ferrous scrap. “These markets are set to grow enormously,” he said.

On the supply side, Christoph Schmidt, who is based in Poland for Germany-based TSR Recycling, said the European market has shown signs of “significant reductions” in scrap generation. He singled out less demolition work and slower peddler traffic as contributing to an obsolete scrap drop ranging from 15 to 20 percent on the continent.

In the stainless sector, Hitesh Agarwal of India-based Jindal Stainless pointed to a forecast that calls for India’s stainless steel output to rise from its current level of 4.6 million metric tons per year to 20 million metric tons or more by 2047.

On the supply side, he expressed concern about the “rise of scrap nationalism” that could make overseas scrap more difficult for India’s mills to obtain.

Agreeing with that notion was Ritesh Maheshwari, a director with MRAI, who called protectionist measures to keep scrap from being shipped across borders “a threat to our supply chains.”

Tobias Kaemmer, CEO of Netherlands-based Oryx Stainless Group, said with or without protectionist measures, there will never be enough scrap for everyone to use 96 percent scrap to make stainless steel as Europe does. Nonetheless, his company continues to invest in Asia to provide stainless scrap blends for those who pursue the material.

An additional challenge for stainless scrap traders this decade has been volatile pricing tied to the price of primary nickel. Sean Davidson of metals information service provider Davis Index asked aloud whether stainless scrap traders would be better off with surveyed or transaction-based pricing, more like ferrous scrap is.

Panelist Doug Kramer of California-based Spectrum Alloys LLC said it’s probably time to decouple stainless steel scrap pricing from primary nickel’s exchange floor value, saying the current method probably is not the best when it comes to figuring out what stainless steel is actually worth.

The 2024 MRAI International Material Recycling Conference was Jan. 23-25 at the Biswa Bangla Mela Prangan convention center in Kolkata, India.