Metal scrap export ban:

Huge foreign exchange saving

Potential for Copper value addition:

Harshini Perera

Some of the SMES and traditional industries were in the verge of collapse in October last year but after the ban on export of metal scrap a reasonable volume of scrap is available to continue their industries.

Melvin Samarasinghe

The ban on export of metal scrap is justified as the country needs metal for all infrastructure development programs and the demand has increased more than 20 times from which prevailed 10 years ago, Foundry Development Services Institute (FDSI) Immediate Past President and Council Member Melvin Samarasinghe told Daily News Business.

The demand for steel scrap in the country per day is 15,000 tons out of which 8,000 tons are locally found and the balance is imported, therefore the demand for steel production is more than the scrap supply.

He said that the local market price of steel scrap currently stands at Rs 50 per kg which is equal to the London Metal Exchange (LME) price. Therefore industries import steel billets in addition to local steel scrap for production of steel.

“Making a reasonable impact on the economy, the usage of steel scrap for local production of construction steel has helped to minimize the price fluctuations because 60 percent of steel is produced using the local steel scrap”, he said.

The Government now should reconsider stopping the licences issued for BOI industries to export their scrap as they could sell their scrap at LME prices in the local market as the main business of BOI companies is not export of scrap.

There is a potential for value addition to Copper too as Copper is considered a precious metal. Currently, the LME price is Rs 950 per kg while the local market price is Rs 650 per kg. Copper is not a metal that will perish as fast as iron and the generation of copper scrap came mostly from electrical installation and grounding of telecom and the electrical wire in the last decade.

“Copper could make a reasonable amount of money and create more jobs by facilitating and banning the export of non-value added products of Copper, while encouraging the local smallholders to start small industry units and encouraging the industry to grow as the steel industry. The production of copper wire and tapes and manufacture of telecom cables should now be encouraged for higher value addition,” Samarasinghe said.