Scrap trade sees a silver lining

MUMBAI: A decision by the ministry of environment and forests (MoEF) to revoke a notification that bars scrap metal imports by traders has come as a relief for over 10,000 traders across the country.

Bombay Metal Exchange (BME) and Bombay Non-Ferrous Metals & Scrap Merchants Association (BNFMSMA) said the move would protect the business interests of small-scale and cottage industries which use around 1 lakh tonne of scrap annually.

The decision to notify scrap imports only for actual users in July on the ground that transportation of imported scrap by traders threatened the environment raised the hackles of associations whose members import 60% of the country���s scrap metal requirement. Their efforts bore fruit after a month when, on Tuesday, Jairam Ramesh, minister of state for environment and forests, gave the representatives an assurance that traders could continue to import scrap as they had done prior to the notification of July 21.

���The minister gave us the go-ahead to carry on our business with the assurance that the condition restricting imports only for actual users would be done away with,��� said Rohit Shah, director BME, who was present at the meeting. ���When asked, we pointed out to the minister that scrap metals were not deemed hazardous under the Basel Convention, to which India is a signatory. Moreover, DGFT, the nodal agency which facilitates imports and exports, has not disallowed the import of scrap.��� However, Mr Ramesh was not available for comment till the time of going to press. ���The move will ensure that small-scale units and cottage industries continue to get scrap at affordable rates,��� said Rasik Kothari, president, BNFMSMA.

Scrap metal also works out Rs 25-30 a kg cheaper than virgin metal. For instance, where pure brass costs Rs 250 a kg, scrap brass works out to Rs 225.

These units do not have the financial wherewithal to import scrap as banks extend credit lines to them only for land and machinery funding and not for raw material import. For imports, they depend on traders, who order containers of 20-tonne capacity against individual requirement of 500 to 1,000 kg.

Scrap metal also works out Rs 25-30 a kg cheaper than virgin metal. For instance, where pure brass costs Rs 250 a kg, scrap brass works out to Rs 225.