With a sharp reduction in supply, availability of scrap has gone down by 40-45% in the global market in the last two years, a senior official of a leading scrap trader told ISMW.
“There is no scrap (in the market). Availability is down almost 40-45 percent,” said Abhijeet Mahanta, Head of India Ferrous Operations of EMR, the world’s leading scrap supplier.
“EMR was processing around 14 million tons (mt) of scrap till 2014, but it fell to 10 mt in 2015 and in 2016 also it is likely to remain unchanged,” he said.
On the movement in scrap prices, he said, “Prices of scrap started falling from September 2015 onwards from a level of $200 per ton. It does not make any economic sense when we have to buy at $150 but sell at $140-160.”
In such a scenario, he said the players in the scrap market “will simply take a break. They will terminate the contracts too. If a contract is not remunerative enough then it does not make sense. The effect of the quick fall in scrap prices is seen 3-4 months later. Till that time we will have some stocks in the yards and keep on processing.”