After a four-month sequential decline, India's scrap imports rebounded in May, rising by 15% month-on-month to reach 0.61 million tonnes, according to data from CYBEX accessed by Kallanish. This increase can be attributed to restocking efforts by Indian buyers between mid-April and early May, in anticipation of higher steel demand following the conclusion of the general election on June 4.

While India typically imports most of its ferrous scrap from the United States, the United Kingdom, and Europe, the highest volume of imports in May came from the United Arab Emirates (UAE), despite the UAE government imposing a $109 per tonne export duty. In recent months, India has preferred imports from the UAE over the US and Europe due to shorter voyage times and a significant spike in freight rates from distant countries.

The surge in freight rates has been driven by a recent container supply crunch, caused by peak shipping season, longer transit times due to Red Sea diversions, and bad weather in Asia. Ocean carriers are skipping or shortening port stops to stay on schedule, exacerbating container shortages. "The UAE is currently our best option for securing scrap due to shorter lead times and the ability to make need-based purchases. Port congestion and high freight rates following US tariffs on China in early May have made sourcing even from Far Eastern countries like Hong Kong, Malaysia, or Singapore quite difficult for us," states a Mumbai-based scrap trader.

Following the US tariff announcement, Chinese manufacturers have brought forward their shipments to the world's largest economy in a bid to deliver products before tariffs are imposed. On the supply side, sluggish domestic steel demand in the UAE and other Middle East and North Africa countries has prompted UAE's scrap sellers to seek alternate markets like India and Pakistan. Scrap exporters are reportedly avoiding the export duty through false declarations, exploiting poor enforcement, according to industry participants.

Stainless steel scrap accounted for about 15% of India's total May scrap imports, at 0.10 million tonnes. From January to May, India's combined ferrous scrap imports totaled 3.95 million tonnes, reflecting a 16% decrease compared to the same period last year.