According to recent estimations, total domestic ferrous scrap consumption, encompassing the steel and foundry sectors, is expected to reach approximately 36 million tonnes, indicating a notable increase from the 31 million tonnes recorded in FY'23.
One of the key drivers behind this surge is the growing reliance on domestic scrap, particularly as challenges related to GST are gradually being resolved. It is expected that the share of domestic ferrous scrap consumption will witness a significant 22% increase, surpassing 26 million tonnes compared to the previous 21 million tonnes. Meanwhile, the share of imported varieties is expected to remain relatively stable at an annual level of 10 million tonnes.
Examining the distribution across segments, it is evident that the steel sector is poised for a significant uptick, with its consumption share expected to rise by 16% from 26 million tonnes in the FY'23 to reach 30 million tonnes. Conversely, foundry purchases are expected to remain relatively steady at around 5.4 million tonnes compared to the 5.2 million tonnes recorded in the previous fiscal year.
Several factors contribute to this optimistic projection, notably the expansion in electric furnace route production. India's crude steel production is expected to witness a commendable 9% increase, reaching an estimated 138 million tonnes in FY'24, with a significant portion of this growth expected to come from the electric furnace segment. This segment, being a significant consumer of scrap as a key raw material, is anticipated to drive the surge in ferrous scrap consumption.
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