Local Indian direct reduced iron (DRI) prices are expected to spike further amid the fallout from the Indian government reducing the number of ports handling metal scrap, traders said on Thursday, April 27.
The traders said that, with the number of ports in the country designated to handle metal scrap reduced from 26 to 14, DRI units located deeper inland or in central parts of India will have to incur higher transportation, handling and storage costs for imported steel scrap.
The traders said that domestic DRI prices have already increased by INR 3,800/mt ($59/mt) since last February to INR 18,000/mt ($281/mt), and the impact of higher transportation and logistics costs on scrap could add an average $5-10/mt depending on location of the DRI units.
As per an Indian government order earlier this month, only ports at Chennai, Cochin, Ennore, JNPT, Kandla, Mormugao, Mumbai, New Mangalore, Paradip, Tuticorin, Vishakhapatnam, Pipava, Mundra and Kolkata will be permitted to handle imported scrap since these ports have the necessary equipment for radiation detection and container scanners.