EU Scrap Export Curbs May Raise Raw Material Costs For Gujarat Industries

Gandhinagar, Oct 12 (KNN) Gujarat’s recycling and manufacturing sectors could face higher raw material costs and supply disruptions as the EU tightens non-hazardous waste exports to non-OECD countries from May 21, 2027, under its revised Waste Shipment Regulation. 

Exports will generally be prohibited unless destination countries receive authorisation, potentially restricting metal scrap supplies to recyclers, foundries and manufacturers. 

The impact on India will depend on its eligibility under the new rules, approved waste categories and shifts in global supply chains, reported The Times Of India. 

Import Dependence Raises Concerns

Gujarat’s industrial hubs, including Ahmedabad, Rajkot, Jamnagar, Bhavnagar and Surat, house recycling, foundry, alloy-making and downstream manufacturing units dependent on ferrous and non-ferrous scrap.

India imported around USD 2.1 billion worth of EU metal scrap in 2025, according to the Metals Recyclers’ Association.

Manish Shah, CMD, ARA Scrap Recyclers, said metal prices had risen sharply over the past year amid declining scrap availability, as several countries restricted exports to support domestic smelting industries.

Stainless Steel Recyclers Face Supply Constraints

Gujarat has around 40 large stainless steel recycling units with a combined installed capacity of nearly 30,000 tonnes per month. Chandragupt Prakash Mangal, Managing Director of Mangalam Worldwide Ltd, said imported scrap meets about 90 per cent of the company’s raw material needs.

Stainless steel scrap prices have risen around 20 per cent in 2026, while availability has declined by about 10 per cent due to export restrictions and war-related disruptions, he said. 

Industry representatives added that tighter supplies have forced recyclers to hold larger inventories, raising working capital requirements.

Sihor And Jamnagar Clusters At Risk

Sihor’s re-rolling mills in Bhavnagar district depend on domestic and imported scrap to produce TMT bars, billets, ingots and steel sections. 

The cluster needs around 3,000 tonnes of raw material daily, with supply disruptions potentially raising costs, squeezing margins and weakening export competitiveness.

Jamnagar’s brass cluster, comprising around 7,000 units and meeting nearly 90 per cent of India’s brass demand, could also be affected. The industry consumes 600–700 tonnes of scrap daily, with imports accounting for about 70 per cent of its feedstock.

Ramjibhai Patel, president of the Jamnagar Factory Owners Association, said restrictions on European supplies would adversely affect the import-dependent sector.

Foundries And Engineering Units Face Higher Costs

Foundries and engineering manufacturers may face higher production costs due to rising scrap and pig iron prices and limited availability of quality alternatives.

Subodh Panchal, mentor at the Institute of Indian Foundrymen, said pig iron accounts for 30–50 per cent of casting material costs, making higher prices a key concern.

Industry participants said switching suppliers could increase sourcing and verification expenses, while inconsistent material quality could raise melting losses and processing costs.

These pressures could drive up prices of castings, automotive components, electrical equipment and industrial machinery.

Domestic Scrap Collection Gains Importance

The proposed EU restrictions could boost domestic scrap collection, segregation and processing to reduce import dependence. 

Gujarat’s shipbreaking, recycling and manufacturing sectors could support metal recovery, though expansion would require infrastructure investment and better coordination across collection networks. 

Industry representatives warned that sourcing scrap through third countries could raise costs and reduce supply-chain transparency. 

(KNN Bureau)