Steel scrap: Meaning, types, price per kg, and how it’s made

India is the second largest producer of crude steel in the world. It’s also a major producer of steel scrap, amounting to almost 25 tonnes annually in addition to imports (Source: GMK Center). Streel scrap comes from various items – structural such as steel beams, old automobiles, railways scraps, among others. Use of scrap metal will naturally lessen the need for iron ore and coking coal extraction, in turn aligning with the country’s environmental sustainability initiatives through reduced carbon emissions.

On that note, let’s take a look at steel scrap meaning, its uses and benefits, types of steel scrap, steel scrap price per kg, and the latest initiatives and industry updates on scrap metals in India.

Steel scrap price per kg in India

As a business owner looking to buy steel scrap, it’s important to follow and know the daily steel scrap rate to buy effectively. The price of steel scrap will differ based on its location, quality, supplier, and other parameter.

Listed below is the steel scrap rate in India by kg/tonne.

*Prices are for reference only and does not include freight, GST, packaging and other charges. Prices differ by location, use, type, brand. Please check with your steel seller for actual scrap steel rates.

Also read: 304 vs 316 Stainless Steel – What you should know before buying

What is steel scrap?

Let’s begin by understanding, steel scrap meaning.

In the steel manufacturing process, there are often leftovers and discarded steel. This is what is referred to as steel scrap. Steel scrap can also refer to steel products that have reached their end of life, such as old vehicles or home appliances.

Steel scrap can be melted, recycled and used as fresh steel for consumption. This reduces the need for new steel production, in turn making steel scrap invaluable to the steel sector and industrial landscape. It is economical, reduces carbon emissions, and maintains the supply of steel consistently.

Also read: Iron scrap prices in India today

Examples of steel scrap:

Steel scraps can be generated from numerous sources, such as:

• Steel beams from old construction buildings or structural
• Automobile body parts, ships, and railway coaches
• White goods and domestic appliances, electronic equipment, etc.

Steel scrap making process

During steel production or steel fabrication, there is some discarded steel. Since steel is a recyclable ferrous metal, it can be repurposed and reused. Similarly, old steel can be melted and used as raw material for new steel production.

It is believed that there are almost 20 different grades of steel scrap with which new steel can be produced.

Here’s a quick look at steel scrap processing:

• Collating steel scrap from multiple sources: The first step is to collect and collate steel scrap from obsolete machinery, manufacturing waste, or any other.
• Sorting scrap: This is an important step and requires sorting based on the type of steel (e.g., stainless steel scrap, carbon steel scrap, etc.). Scraps that do not meet the qualifying grades have to be discarded. Generally, magnets are used for separation of steel from the others.
• Preparing the scrap: This step involves two key methods – cleaning and cutting. Cleaning involves clearing the scrap of any dust, rust, and paint to prevent contamination. Cutting involves resizing large chunks of steel scrap and cutting them into manageable, easy-to-work with sizes. Often, if the scraps are of very small size, they are brought together (i.e., balling) for convenience.
• Melting steel: This is a vital stage in the steel scrap making process, where the collected scrap is melted in the furnace (usually an electric arc furnace or oxygen process) and then purified to ensure that it meets the required quality standards.
• New steel making: In the final step, the molten steel is cast into new forms based on requirements. It is good as new steel and can be used for industrial applications as required.

Types of steel scrap

When we talk about steel scrap price per kg, there’s the concept of post- and pre-consumer scrap. This simply means, if the scrap is from the steel fabrication process (pre-consumer scrap) or by melting steel from old consumer goods (post-consumer scrap).

From our previous discussion, we understand that steel scrap can be procured from different sources. Here’s a look at the main types of steel scrap as a business owner you should be aware of:

Home scrap:

This is what is produced during actual steel making, such as leftovers in the casting. This can easily be collected, cleaned, and prepared for recycling within the steel plant. Since this is what comes from the actual steel making process, the quality of scrap is known (i.e., clarity on composition) and high-grade. Recycling therefore is convenient, economical, quick and reduces waste.

This is also known as runaround scrap.

Industrial scrap:

This is the scrap that comes from steel products that have reached their end in a short span of time. Example would include vehicle body parts, which lasts for some time (e.g., 1-2 years) and need to be recycled once it reaches the end of its lifespan.

As can be understood, there’s consistency in the quality of these steel scraps, though there’s meticulous cleaning and cutting required. In general, to maintain the supply of steel in the market, auto-manufacturers and the industry by large have pre-defined contracts with scrap collectors and steel mills for collecting old vehicles in time. This is also known as prompt scrap.

Obsolete scrap:

This is the metal scrap collected when an object reaches the end of its lifetime usually after a couple of years.

From collection to sorting and preparing, the steps are more intensive as different grades of steel scrap is included. Also, the cleaning process has to be thorough as all additional elements (e.g., alloys, paint, etc.) have to be removed to maintain the quality for scrap recycling.

Capital scrap:

This refers to steel that has served a long life (e.g., ships, railway wagons) and can now be recycled for new steel making. This is usually collected in bulk large quantities and undergoes an intensive sorting and cleaning, cutting, shredding process to ensure the resultant scrap steel is pure and devoid of any elements of contamination.

Steel scrap recycling policy and what to do next

Steel making is an intensive process and requires iron ore and coking coal. Using scrap steel for generating new steel therefore is not only economical and environmentally friendly but can also create a circular economy and put lesser pressure on natural resources.

In India, both primary and secondary steel manufacturers use steel scrap in production processes.

The steel scrap recycling policy of the Ministry of Steel has been established to ensure that the quality of steel scrap available is as per certain guidelines. It standardised the scrap recycling process and details about the location of collection/dismantling centres.

As a business owner, if you want to start a steel recycling centre or work with steel scrap, it’s essential for you to know the scrap recycling policy in detail so that you abide by compliance and procure the best quality steel scrap for your business.

Author: Sohini Banerjee

Sohini is a seasoned content writer with 12 years’ experience in developing marketing and business content across multiple formats. At Tata nexarc, she leverages her skills in crafting curated content on the Indian MSME sector, steel procurement, and logistics. In her personal time, she enjoys reading fiction and being up-to-date on trends in digital marketing and the Indian business ecosystem.