India

India’s recycled steel market has navigated a challenging phase in recent months, shaped by a combination of rising import prices, persistent currency depreciation and subdued steel demand. These factors have collectively weighed on market sentiment, prompting steelmakers to adopt a cautious procurement strategy, prioritising immediate requirements over forward booking.

Imported recycled steel prices have shown a consistent upward trajectory. UK-origin HMS 80:20 increased from US$ 330 per tonne in January to US$ 345 in February, US$ 365 in March and then US$ 385 in April. Shredded scrap followed a similar trend. These increases have been driven largely by tight global availability, constrained vessel space, elevated freight rates and geopolitical tensions in the Middle East, all of which have kept landed costs firm. At these levels, imports have remained commercially unviable for many Indian buyers, particularly in a weak demand environment.

This cautious stance is clearly reflected in import volumes. Arrivals declined from 0.43 million tonnes in January to 0.35 million tonnes in February and then to around 0.25 to 0.30 million tonnes in March, taking total first-quarter imports to approximately 1 million tonnes. Bulk cargo activity remained limited, with trade largely confined to containerised shipments. The UK, Bahrain, the USA and Brazil continued to be the key suppliers, albeit with moderate volumes.

Currency depreciation has further intensified cost pressures. The Indian rupee weakened from 91.7 to the US dollar in January to 93.5 in March, and slipped beyond 95 in April, marking record lows. This widened the bid-offer gap significantly, as mills found it increasingly difficult to align purchase economics with elevated import prices.

On the demand side, domestic steel consumption provided limited support. Recycled steel consumption declined from 3.4 million tonnes in January to 3.3 million tonnes in February and 3.0 million tonnes in March, reflecting slower construction activity. In response, mills increased their reliance on domestic recycled steel and direct reduced iron, optimising cost structures and reducing dependence on imports.

The broader trend reinforces this shift. As noted, recycled steel imports fell sharply to around 1 million tonnes in the first quarter of 2026 - down over 55% from the 2.3 million tonnes recorded in January-March 2025 and nearly 30% quarter over quarter from 1.5 million tonnes in October-December 2025. In contrast, domestic recycled steel consumption climbed 11% year on year to 8.65 million tonnes in the first quarter, while crude steel production also registered healthy growth to 44.5 million tonnes. This indicates a clear structural transition: higher steel output with relatively lower reliance on imported recycled steel.

India imported approximately 8.2 million tonnes of recycled steel throughout 2025, marginally below the 8.5 million tonnes for 2024. Despite this, recycled steel-based steel production has continued to expand.

Crude steel production in early 2026 showed some variability, with output at 15.15 million tonnes in January but declining to 14.03 million tonnes in February, before recovering to 15.32 million tonnes in March. Overall, first-quarter production of 44.5 million tonnes was up 11% year on year from 40.09 million tonnes and 6% higher on a quarter-over-quarter basis from 42.06 million tonnes in October-December 2025.

Recent years have brought rising demand for recycled steel alongside rapidly expanding steel production and good demand for steel. Looking ahead, the structural outlook for recycled steel remains robust in India: demand is expected to grow steadily, supported by infrastructure expansion and government support, such as through the vehicle scrappage framework. However, domestic recycled steel availability continues to lag total requirements, necessitating a sustained role for imports.

In the near term, market participants are expected to remain vigilant in closely tracking demand recovery, price corrections and currency stability.