·
Indian
Customs Move to Implement UAE Ban Questioned
Indian Customs have stopped scrap import
clearances for UAE-origin material following a detailed risk analysis carried out
by the National Customs Targeting Centre (NCTC). It appears that metallic scrap
is being imported from the UAE despite an export ban imposed by authorities in that
country and the importer squarely falls within the ambit of the export ban.
The NCTC has identified the following
bills to be risky at customs house code in relation to misdeclaration/forged documents,
importer, supplier, port of shipment gross weight, etc.
Indian market participants are cautious
and waiting for a clear picture. "I don't know why the customs are curious
to know details about the imported material. It will create a problem in India,"
said a market source.
India's imports of ferrous scrap for steelmaking
stood at around 9.8 million tonnes (mnt) in FY23-sharp
rise compared with 3.6 mnt in FY22, as per SteelMint data. The UAE's share in total imports was around
0.99 mnt despite the export ban. The intervention by the
customs authorities has stoked panic in the market.
UAE's scrap export ban
The Ministry of Economy, UAE, had issued
a notice in March 2020 stating that steel scrap and waste paper exports were to
be banned, which was periodically extended thereafter. Recently, the country issued
a similar notice extending the export ban, which was effective from March 2023 for
a period of four months ending 19 June this year in order to support the country's
domestic demand.
The major steelmakers in the UAE are located
in Abu Dhabi while Shattaf Steel is based in Sharjah.
Impact
of ban
The UAE has been a major source of imported
HMS scrap for Pakistan and India owing to short transit time and a huge variety
of grades and quality of material offered.
Despite the UAE's scrap export ban, India
imported around 83,310 t in March this year. If sources are to be believed, there
have been HMS offers floating in both Pakistan and India from the UAE. Recent offers
for HMS 1 were reported at $420-425/t CFR Nhava Sheva. Market sources believe that
prices may go up as buyers are looking for other sourcing countries.
UAE containers on hold
Around 1,000 of containers are held up
at Indian ports following the declaration by customs. In India, Nhava-Sheva, Mundra
and Kandla are the major destinations that receive UAE material. In April, around
13,089 t of scrap arrived at Mundra Port, while the other two major ports received
minimal quantities. The average transit period is around 5-6 working days from the
UAE to India. Interestingly, buyers are interested in UAE material owing to zero
freight between the two countries, SteelMint learned from
sources.
"There is a buzz that some containers
will be re-exported back to the UAE,"
said a reliable source.
Export ban by other countries
Other scrap sourcing countries like South
Africa and Kuwait have also banned scrap exports. Indian buyers are usually looking
for cost-effective material from these origins, yet the export ban has disappointed
steel producers and other market participants.
Domestic market overview
The domestic scrap market, mainly in north
India, witnessed stability in prices in April compared with March, as buyers procured
material as per requirement only due to limited semis and finished steel trading.
However, trade inquiries for the raw material
witnessed an improvement in the last couple of days with improved steel demand.
Outlook
Considering the muted domestic market
situation, Indian buyers may opt to wait and watch for the time being. Buyers may
source material from other origins which are cost-effective. However, the global
market is still in a downtrend owing to bearish sentiments.
Buyers are waiting for the next round
of Turkish deals. However, limited deals are being heard currently. Prices have
edged down to $370/t CFR Turkiye in a recently concluded
deal from the US.
[Source: SteelMint/10.05.2023]