Indian buying of ferrous scrap has mostly been by traders who are taking positions and then selling to actual users in smaller lots. Indirectly, they are also financing the mills, some of which are facing issues with foreign LC openings owing to the tougher banking restrictions now in place. So this is a win-win situation at the moment.
National elections in India are on-going and being held in phases across the country. The current government is likely to return to power but macro-concerns - such as high unemployment, a real estate slowdown and bad loans in the banking sector - all still need to be tackled. The upcoming monsoon season is forecast to be normal, which will be a relief for the incoming government, but steel demand is expected to be a little slow until the monsoons are over.
Some bankrupt mills - including Bhushan Steel, Monnet, Essar and Usha Martin - have found new owners. Such consolidation within the domestic steel industry is a step in the right direction towards bringing back credibility and growth.
Nathani Group of Companies (IND), Vice-President of the BIR Ferrous Division