Traders seek repeal of ban on scrap imports

Faced with a huge shortage of base metal scraps due to a sudden ban on scrap imports, the Mumbai-based Bombay Metal Exchange (BME) and the Bombay Non-Ferrous Metals & Scrap Merchants Association (BNFMSMA) have urged the government to repeal the move.

Traders argued that the environment ministry’s concern over base metal scrap was overdone as it was used as a raw material for secondary metal production. Smelted scrap didn’t affect the environment at all, said Rohit Shah, director, BME.

Officials of the two trade bodies representing over 5,000 traders in the country met Chief Commissioner of Customs K R Bhargava and Commissioner of Imports A K Das at Nhava Sheva on Tuesday. According to Shah, both officials were very co-operative and assured about clearing around 500-700 containers at various ports by August 31.

The Customs department on July 21 had allowed import of base metal scraps by actual users only instead of both traders and users earlier, citing environmental concern.

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

The demand of lifting the ban assumes significance as about 40 per cent of metals, especially copper and brass used in the country, is obtained from re-melting of scraps. Secondary metal (second) thus obtained is used by handicraft and cottage industries. Suspension of scrap imports may hit these industries badly as scrap procurement through local sources is negligible. India imports approximately 1.5 million tonnes of metal scrap to meet the demand of small scale industries. Currently, the scrap melting industry is operating at 20-25 per cent of its capacity due to scarce raw material.

Now, since the government has suspended imports, scarp shipments have been stopped by the Customs officials. It has resulted in small scale industries using these materials being badly hit as they don’t have the option of using virgin metals which are expensive. Brass, used for making household appliances, would become costlier in case virgin copper and zinc were used due to the price differential of 25-30 per cent for their virgin and scrap varieties.

BNFMSMA President Rasik Kothari said that many small scale, cottage and handicraft industries could not withstand this strain as they lack the financial wherewithal to stay course.

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