Nhava Sheva to Kolkata: Ferrous Scrap Imports Drop 20% in FY2026

Indian secondary steel mills cut back on foreign scrap purchases as landed import prices lost parity with domestic material. Indian ferrous scrap imports contracted by 20 percent year on year in financial year 2026, driven by wider price discounts on local supply and soaring ocean freight costs.

While total scrap consumption inside India reached a record 41 million mt, local generation climbed 22 percent to 32 million mt. This domestic surge displaced overseas volumes, leaving importers holding expensive sea-freight commitments while local electric arc and induction furnaces switched to domestic melting scrap, sponge iron and pig iron.

Regional Port Despatch and Grade Breakdown

Discharges fell across every major coastal trade lane, but northern and western discharge points saw the largest volume drops. Western Indian ports remained the primary import hub but recorded an 18 percent decline to 2.8 million mt. Deliveries bound for northern mills experienced the sharpest decline, dropping 27 percent to 1.77 million mt.

Southern port discharges fell 15 percent to 1.63 million mt. Eastern ports proved the most resilient, slipping just six percent to 630,000 mt.

Grade dynamics shifted as buyers rejected higher-priced processed scrap. Heavy melting scrap recorded the largest drop in absolute tonnage. Containerised MS shredded saw the steepest percentage fall at 35 percent as buyers refused to pay price premiums for processed grades.

Landed Costs and Freight Disruption

Landed pricing drove the shift away from foreign yards. Europe-origin HMS 80:20 delivered to Jalna hovered between INR 33,000 and INR 37,000 per mt over the fiscal year. Domestic scrap traded consistently lower, maintaining a price advantage of INR 2,000 to INR 4,000 per mt.

Subsequent spot pricing confirmed this spread. Import melting scrap at Nhava Sheva was priced at $332 per mt, or roughly INR 33,800 per mt inclusive of freight, while European shredded scrap was offered at $388 per mt CFR Nhava Sheva. In comparison, Mumbai domestic HMS 80:20 dropped to INR 31,400 per mt DAP, while Ahmedabad domestic scrap traded down to INR 31,800 per mt.

Import viability deteriorated further due to external cost pressures. Red Sea vessel rerouting, Middle East geopolitical tension and higher ocean freight rates lifted landed tariffs in early 2026. Currency movements compounded the burden as the Indian rupee weakened past INR 90 per US dollar in the final quarter of financial year 2026, driving up final bill of entry clearing values.

Origin Flows and Regulatory Outlook

Suppliers in the United States remained India's primary source of imported scrap despite sending 28 percent lower volume over the year. Brazil was the sole major supplier among the top ten origins to post growth, expanding shipments to India by 30 percent on competitive ocean freights and strong HMS availability.

Importers should track the operational pace of end-of-life vehicle recycling facilities across supplying states. A slower rollout of vehicle scrapping units could cap domestic scrap generation, leaving a structural deficit of 1 to 2 million mt that may require short-term import re-engagement.