AM/NS India commissions first scrap unit, plans three more by FY26

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ArcelorMittal Nippon Steel India (AM/NS India) has commissioned its first scrap processing facility, and is looking to set up at least three more by the financial year 2025-26 (FY26). The firm is setting up the unit to meet the growing demand for high-quality scrap for its steel production and to strengthen the domestic supply chain.

 

The company’s first scrap facility at Khopoli in Maharashtra, having a capacity of 120 kilo tonnes per annum (Ktpa), is already up and running.

 

Akshaya Gujral, executive director of downstream operations at AM/NS India, said, “By the end of FY26, we should have four functional scrap yards. This should give us approximately 0.5 mt of scrap which we can process and consume directly in our processes.”

 

By processing scrap at its own facilities, AM/NS India hopes to enhance material quality and yield while reducing conversion and logistics costs, and formalising the scrap industry. The investment in the facilities is expected to be about ₹350 crore.

 

Gujral said that estimates suggest India would be a scrap-short nation. “The scrap demand is expected to be around 50 million tonnes (mt) by 2030-2035 and scrap generation is expected to be about 40 mt.” In 2024, scrap demand in India was 39 mt.

 

So, India would have to rely on imports. “Import of scrap will also diminish. The sources will dry up as the entire world understands the benefits of scrap and wants to consume more of the scrap that they generate within their countries,” said Gujral.

 

India imported 8 mt of scrap in 2024. Major countries exporting scrap to India are the US, UK, Brazil, Australia, Poland, Malaysia, Bahrain, among others.

 

According to market analysts, about 14-15 per cent of India’s scrap requirements are sourced from the US. As US steel mills step up production in the wake of tariffs, scrap exports may get impacted.

 

AM/NS India noted that India’s scrap supply chain is highly fragmented, with materials passing through multiple intermediaries – from local scrap collectors to scrap yards – before reaching the consumption points. This inflates costs, diminishes material quality and adds little value across the chain, according to the company.

 

To achieve its goal of 10 per cent scrap utilisation by 2030, AM/NS understands that it cannot depend on a fragmented supply chain and is therefore setting up the processing facilities. 

 

About 65 per cent of AM/NS India’s existing steelmaking capacity is gas-based direct-reduced iron (DRI) – electric arc furnace (EAF), a process suited for using scrap. Apart from captive use, some of the scrap may also be sold in the external market.