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Impacts of Covid-19 on Scrap Industry

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by - 5/26/2020 1124 Views

Scrap export has been categorized as nonessential during this pandemic but as essential in lifting up the Economy. Steel Industry plays a vital role in the economy of developing nations.

he pandemic lockdown has already given a huge strike on Recyclers, traders, and manufacturers. Many Scrap yards have been closed considering the safety of laborers. The production volume of various scrap has been shrunk. There is a huge fall in the demand for ferrous scrap which again hits the international scrap market. The shortage of ferrous scrap such as HMS 1 & 2 has resulted in 21% rise in international scrap price within a short span of 12 days from April 3 to April 15. Not only in the international market there is also a fall in domestic scrap price in steel production.  World crude steel production facing a downfall of 1.4% compare to the same period in 2019.  Global steel production declined 13% to 137.09 MT as compared with 157.67 MT in April 2019.
On the other hand the supply chain of scrap has been affected due to the delay in shipping, port clearance, lack of labors, and suspension of domestic public transport.

Scrap As Essential and Non Essential During Pandemic

Some countries have categorized scrap as essential and some countries consider it as non-essential during the pandemic. However, waste management and recycling are mandatory in our day to day life. Domestic scrap markets still have a demand with a pathetic price fall. Countries like Malaysia, Uk, China are permitted to import essential goods.

USA Lineup Scrap Recycling As Essential

USA has not shut down their scrap yards completely as they consider scrap recycling as essential during the lockdown.  Even though there is a hit in scrap export, the domestic buyers and sellers are still in business to maintain the supply chain. The highest export prices in US have disappointed the domestic scrap dealers where they face less inventory and unfavorable offers provided by domestic mills.

European Markets Are Open

In Europe, scrap has been categorized under critical industry and non essential during this pandemic period. The small scale scrap industries, residing in France are closed. Whereas the large scale enterprises are running with 40% of scrap yards. Scrap yards in Italy are under complete lockdown. Most of the European Automotive Manufacturers have temporarily stopped their production which affected the collection of new scrap from automotive companies.

UAE Scrap Yards

The Economy Ministry of United Arab Emirates has announced a complete ban on ferrous scrap export. This ban can have a hit on India which relies on UAE for about one-fifth of ferrous scrap imports. The continuous lockdown has also an impact on purchasing the scrap.

 Ferrous metal scrap and Non- Ferrous metal scrap yards in Sharjah are functioning but still there is a downfall in deliveries and upcoming payments.

Singapore Scrap Yards

Most of the scrap yards in Singapore are open and under operation but they are running with minimal labors. Officially there is no lockdown in Singapore. The labors of Singapore scrap yards are mostly Chinese and Malaysians who haven’t returned since Chinese New Year and border closures.  There is Major disruption to container shipment as there are shortages in containers.

Indian Scrap and Steel Industry

Indian trade markets has almost paused their operations since lockdown.  Import markets remain unchanged due to congestion charges where an Indian trader has to pay around $1,400 per box for a 20ft container of both ferrous and non-ferrous scrap from Europe to South Asia

India plays a vital role in the steel industry wherein 2018; India was the second-largest steel producer in the world. Going forward, our Indian steel Association predicts steel demand to grow 7.2 percent in 2020. Major steel industries in India reside in Mumbai, Jharkhand, and Gujarat which are under lockdown.

As a helping hand, the Indian Government has given their contribution in this pandemic situation to the Indian Steel industry which we will be discussing in the upcoming article.

Find visually video summery on this at https://www.youtube.com/watch?v=RlvH-sw6KcY



Category : Metal

Tags : Steel Scrap, HMS 1&2, Current Scrap Market, Steel Industry

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About Benny Jebaraj

I have been with recycleinme.com for the past four years and enjoy working as the Administrator of the Scrap Prices section.  I am graduated as Master of Business Administration in Human resource management. Why I have chosen this course is because I’m very much fond of Business Administrati .... more info


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