Four things we learned at the MRAI 2023 scrap conference in Kochi, India

The Material Recycling Association of India’s annual International Metals Recycling Conference (IMRC) on February 2-4 saw the event return to southern city of Kochi for the first time since 2019 and, judging by the demand for rooms in the run-up to the event, there has been a massive increase in the numbers attending

With the grandiose Grand Hyatt Kochi Bolgatty hotel sold out months ahead of the conference, it is unsurprising that the glittering lobby was teeming with attendees throughout the three-day event and the exhibition hall was a real hive of activity.

But while conference delegates were almost unanimously optimistic about India future as a growing consumer of ferrous and non-ferrous scrap, they also highlighted some of the key challenges that lie ahead.

Ambitious steel scrap targets on way

The growing enthusiasm for India’s scrap market is, perhaps, unsurprising. In a year of economic instability for much of the western world and continued jitters in China, India’s economy is forecast to grow 6.1% in 2023, according to the International Monetary Fund (IMF).

And Indian government officials present at the event made it clear that metal recycling, along with the many downstream industries it supports, will be central to the country’s economic boom.

To cut down on CO2 emissions, the authorities are calling for 25% of its steel production to be dependent on ferrous scrap by 2028, which should increase to 50% by 2047, India’s minister of steel, Jyotiraditya Scindia, told delegates at the event on Saturday February 4.

To increase the use of steel scrap, industry figures have said that the country will have to both improve its collection processes and bring more scrap supply into the organized sector. But protectionist moves related to steel scrap coming to India from key suppliers, such as the European Union, the United Arab Emirates and South Africa, could create lead to availability issues for India in the future.

Demand for steel scrap in India has been increasing in 2023, after a slump in prices at the end of 2022. Fastmarkets’ index for steel scrap shredded, index, import, cfr Nhava Sheva, India, averaged $454.12 per tonne in January, up from $437.45 per tonne in December.

Concerns over the quality of non-ferrous scrap

The Bureau of Indian Standards (BIS) is set to introduce a set of standards for non-ferrous scrap metals for the first time this year, but some market participants worry that the stricter impurity thresholds will badly limit imports to India.

One major Indian recycling source told Fastmarkets on the sidelines of the event that India should not be limiting the types of aluminium scrap it is importing because it must first grow its industry. This is because India is much less developed than China, where strict scrap import rules have cut off inflows of zorba (mixed non-ferrous, but mostly aluminium, shredded scrap from the automotive sector) in recent years.

He added that, after seeing the uproar among recyclers toward the proposed rules at the event, he expects the BIS and Indian authorities to soften the standards.

According to panelists at the MRAI non-ferrous session on February 4, India imported around 1.5 million tonnes of aluminium scrap over the past year,

Some of that total includes zorba with high levels of impurities, with sources saying they have seen or heard of zorba with a relatively low (50-70%) aluminium content being imported to the country. Zorba typically has more than 90% aluminium.

Attendees also highlighted issues with the continued imposition of a 2.5% import duty on aluminium scrap, although some industry bodies, such as the Federation of Indian Mineral Industries, would like to see the duty level rise to 10%.

More rigorous scrap inspections

On the sidelines of the event, some recyclers raised concerns over the difficulties posed by tougher inspection procedures for scrap cargoes coming into India — particularly the requirement to provide proof of a physical pre-shipment inspection at the port of origin, which was added to the handbook of procedure by India’s Commerce Ministry on January 5.

The new measure requires two photographic proofs: one by an inspector at the port of loading, showing the scrap metal cargo’s door half-opened; the other showing the inspector standing in front of the sealed container.

Both photos must show readable numbers on the container, to ensure it is the same container and must be sent using the same IP address. Previously, no photographic proof of any inspector was required to obtain a pre-shipment inspection certificate (PSIC).

The PSIC is issued by an independent inspection agency and is a mandatory document required by Indian customs for the import of scrap metal.

The authorities started to crack down on inspection procedures after alleged cases of forgery, which are purported to show that inspections were carried out by the same inspector at several different locations across India on the same day, sources from the inspection side and from recycling companies told Fastmarkets on the sidelines of the event.

MRAI officials have hit out against the new rules and also highlighted the need for using scanners at Indian ports to detect radioactive materials and other non-desirable elements in scrap cargoes. But the recycler sources said the inspection agencies were likely to resist such a move.

Battery raw materials recycling set to grow

India will grow its battery recycling sector to feed recycled battery raw materials to its nascent battery cell-producing industry over the next few years, Aln Rao, chief executive officer of India’s Exigo Recycling and director of the MRAI, said at the event.

And panelists said that India’s lack of domestic deposits for key energy transition metals, such as cobalt, meant that being able to recycle batteries already located in India will play a key role in providing feedstock for the country’s battery producers serving the electric vehicle (EV) sector, among others, panelists said.

In the next two to three years in India, we will see many recyclers able to offer battery-grade materials to the cell manufacturing companies

“In the next two to three years in India, we will see many recyclers able to offer battery-grade materials to the cell manufacturing companies,” Rao said.

But to achieve this, he added, the Indian authorities must look at developing the technology to domestically recover more of the crucial metals from black mass, be it via pyrometallurgic or hydrometallurgic processes.

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