India holds off on higher zorba duties

India has decided not to raise import duties on zorba in its latest budget, quelling fears from US exporters that expected the measure to further reduce Indian demand for the nonferrous scrap grade.

After China began severely restricting its imports of zorba last year, India secondary smelters have stepped in as important global buyer of the commodity, which is now in oversupply in the US.

Cif India import prices for 95/2 zorba have dropped significantly over the past two months as the country's automotive industry struggles and demand for ADC12 alloy softens. But US exporters feared that moving import duties to 10pc from 2.5pc would accelerate the market's decline.

Cif India prices for 95/2 zorba fell to a more-than six-month low of 40-42¢/lb last week, their lowest level since Argus began assessing it in December 2018.

The Indian Primary Aluminum Association has been lobbying the government for an increase in aluminum scrap import duties in order to increase consumption of primary aluminum, which competes with secondary aluminum alloy in some applications.

Other nonferrous scrap grades in question

While zorba imports remain untouched, some less-liquid nonferrous scrap grades could face more scrutiny.

Multiple nonferrous grades, including throb and thirl — Institute of Scrap Recycling Industries (ISRI) names for aluminum remelt scrap ingot and aluminum dross, respectively — will be "omitted" according to the budget's text. The meaning of the phrase is murky though, a second exporter to India said.

"We have asked for further clarification, because many people have their own import licenses that are valid through the end of the year," he said.

The omission is likely not an outright ban of these scrap grades, but it could point to future restrictions on volume or higher duties.

"Whatever [scrap] is already on the water, we'll have to see, but for new orders [of omitted scrap grade], I am just holding off," he said, "We hope to resolve and get the final clarification sooner than later."

Remaining omitted scrap grades include empty brass shells (ISRI names lake and lamb), manganese bronze solids (parch), and various grades of zinc and lead.