Ban on scrap imports revoked

In a move to ease the supply of secondary non-ferrous metals, the government has revoked the month-long ban on scrap imports. The decision will help in clearing about 1,000 containers clogging ports without any customs official’s intervention.

In a meeting with the representatives of over 5,000 traders across the country, especially from Mumbai and Gujarat, Jairam Ramesh, Minister of State for Environment and Forests, announced lifting of the ban on Tuesday. The notification to this effect is likely to come soon.

The development assumes significance as traders would now be able to import scrap to produce secondary metal by melting the scrap. About 40 per cent of copper and aluminium consumed in India is secondary as it is made by re-processing scrap. Secondary metal obtained is used by handicraft and cottage industries. The suspension of scrap imports had hit these industries badly as procurement through local sources is negligible.

India imports approximately 1.5 million tonnes of metal scrap to meet the requirements of small scale industries. Currently, the scrap melting industry is operating at 20-25 per cent of its capacity due to low availability of raw material.

The customs department on July 21 had allowed imports of base metal scraps by users only, instead of traders, citing environmental concerns. The government had suspended scrap imports saying that the re-processing of the metal discharges harmful gases affecting the environment.

“The minister was convinced that storing or melting of scrap does not affect the environment as the metals such as copper and aluminium do not lose any chemical or physical properties and nor do they rust to discharge hazardous gases,” said Rohit Shah, director of the Bombay Metal Exchange (BME).

The meeting was represented by BME, Bombay Non-Ferrous Metals & Scrap Merchants Association (BNFMSMA), Gujarat Scrap Traders Association (GSTA) among others.

Since domestic sources of scrap collection are yet to pick up, traders and re-processors have no option but to import to run secondary smelters.

Traders argued that the ministry’s concerns over base metal scrap were exaggerated. Smelted scrap did not affect the environment at all, Shah added.

Used metals such as copper, brass, zinc, nickel and a mixture of all these as secondary metals and scrap have been imported traditionally from a number of countries.

Since the government had suspended imports, scrap shipments were stopped by the Customs officials resulting into small scale industries, dependent on these metals, being badly hit as they cannot afford the expensive raw metals. Brass, used for making household appliances, would become costlier in case raw copper and zinc were used due to the price differential of 25-30 per cent for their raw and scrap varieties.

If raw metals such as copper cathode and zinc are used, the product cost will be higher by Rs 30-35 a kg. This will make the domestic industry yield space to countries such as Taiwan, Korea and China for handicraft exports.