Iron and steel scrap makes up most of the tonnage in any factory clearance, plant dismantling or maintenance shutdown. Even though the rate per kilogram is lower than for copper or brass, the volume means ferrous scrap often drives the total value of a deal. A difference of just ₹2 per kg on 50 tonnes is ₹1,00,000. This guide explains how iron scrap is graded and priced, and how industrial units in Varanasi and Purvanchal can sell ferrous scrap profitably.
Types of iron and steel scrap
Ferrous scrap is not a single product. Mills and foundries buy specific grades for specific furnaces.
MS (mild steel) scrap
Angles, channels, beams, plates, pipes, rods and fabrication offcuts. This is the most common industrial ferrous scrap. Thicker and cleaner MS commands better prices.
HMS 1 and HMS 2 (heavy melting scrap)
International grades widely used in trade. HMS 1 is heavier, cleaner steel at least 6 mm thick; HMS 2 includes thinner and lighter material such as black and galvanised steel. Imported HMS is often sold as an 80:20 blend of HMS 1 and HMS 2.
Cast iron (CI) scrap
Machine beds, engine blocks, pump casings, manhole covers and pulleys. Cast iron has higher carbon content, is brittle and is mostly consumed by foundries. It is priced separately from MS.
Turnings and borings
Fine chips from machining. They oxidise quickly and contain cutting oil. Unless compressed into briquettes, they fetch lower prices.
Light and sheet scrap
Thin sheets, tin cans, light gauge cuttings and roofing sheets. These melt with higher losses, so they are priced lower or bundled.
Rail and special steel
Rails, wheels and alloy steels have their own markets and often fetch premiums when correctly identified.
Indicative iron scrap rates (October 2026)
| Grade | Indicative ₹/kg |
|---|---|
| Heavy MS (6 mm and above, clean) | 31 – 34 |
| Mixed MS structural | 28 – 32 |
| Light sheet / thin cuttings | 24 – 28 |
| Cast iron | 24 – 29 |
| Turnings (loose) | 18 – 23 |
| Rusted and contaminated mixed | Case-by-case |
These are indicative bands for industrial lots in the Varanasi region. Live rates depend on daily steel market movements.
What drives iron scrap prices
Domestic steel prices. When finished steel and billet prices rise, mills pay more for scrap.
Sponge iron and pig iron prices. Induction furnace operators choose between scrap, sponge iron and pig iron. If sponge iron becomes cheaper, demand for scrap weakens.
Import parity. Indian mills also import HMS and shredded scrap. Landed prices of imported scrap at Indian ports act as a reference point for domestic rates.
Construction season. Monsoon months typically see weaker demand for long steel, which flows back to scrap prices.
Freight. Ferrous scrap is heavy and low-value per kg, so trucking costs from your site to the mill take a meaningful share of the price. Sites closer to highways and industrial clusters like Ramnagar net better rates.
How to raise the value of your ferrous scrap
- Separate cast iron from MS. Mixing them forces the buyer to price everything at the lower rate or spend time sorting.
- Remove non-ferrous attachments. Copper wiring, brass valves, aluminium parts and rubber should be taken off.
- Cut oversized items. Large structures that cannot be loaded or charged into a furnace require cutting. If the buyer does the cutting, the cost comes out of the rate.
- Bundle light material. Pressed bundles load more efficiently and melt better.
- Keep turnings oil-free and dry. Draining oil and storing chips under cover reduces deductions.
- Avoid soil and concrete. Material dragged through mud or with concrete attached attracts heavy deductions.
Weighbridge weighing for ferrous scrap
For truck lots, insist on a certified weighbridge:
- The empty truck is weighed (tare weight).
- The loaded truck is weighed (gross weight).
- Net weight = gross minus tare.
- You receive printed slips for both, with vehicle number, date and time.
In Ramnagar, Chandauli, our head office is directly opposite Swastik Dharm Kata, which makes weighment quick and transparent for local units.
Deductions to watch for
Buyers sometimes apply percentage deductions for dust, moisture, rust or attachments. These can be fair if clearly explained, but they should be agreed in advance and stated in writing. Unexplained "kata" deductions after weighment are a common source of disputes.
Documentation and compliance
Ferrous scrap sales between businesses require proper GST invoicing, and since October 2024 metal scrap transactions are subject to specific reverse charge and TDS provisions under GST. TCS under the Income Tax Act may also apply. For inter-state or high-value movements, an e-way bill is needed. Check the latest rules with your accountant before large sales.
Selling iron scrap from plant dismantling
When a shed, structure or plant is dismantled, the ferrous scrap value usually offsets most or all of the dismantling cost. A good buyer will quote dismantling and scrap together, so you can compare the net outcome. Make sure the agreement covers safety responsibility, timelines, debris removal and site restoration.
A worked example: why grading matters on volume
Consider a fabrication unit in Chandpur Industrial Estate with 40 tonnes of ferrous scrap: 25 tonnes of heavy MS plate and structural offcuts, 8 tonnes of cast iron machine parts, and 7 tonnes of light sheet and turnings. Sold as one mixed heap, a buyer will price conservatively, often close to the light-scrap rate, and add deductions for sorting. Sold in three segregated heaps, heavy MS earns the top MS rate, cast iron goes to a foundry buyer at the CI rate, and only the light material is priced lower. A difference of even ₹2–3 per kg on the heavy portion alone is worth ₹50,000–75,000 on this lot.
Storage and safety tips for ferrous scrap yards
- Use designated bays. Mark separate areas for MS, CI, light scrap and turnings so production staff drop material in the right place.
- Keep heaps stable. Loose stacks of structural steel can shift and injure workers. Keep heights low and edges secured.
- Cover turnings. Rainwater on oily chips creates runoff and adds weight that buyers will deduct.
- Control access. Ferrous scrap is heavy, but theft of high-value pieces such as rails and heavy plate is common. Lock the yard and record outgoing loads.
- Clear regularly. Ferrous scrap rusts over time, and rusted material earns less. Monthly or quarterly clearance usually beats long storage.
Questions to ask a ferrous scrap buyer
Before you sign, ask: Do you have your own trucks and gas-cutting crew? Who is responsible for safety on our site? Which weighbridge will you use? How will deductions be calculated? When will payment be made, and to which account? Can you provide a GST invoice and e-way bill? A professional buyer will answer each question clearly.
Iron scrap terms you will hear in the market
- Bhari loha / heavy melting: Thick MS plate, beams and structurals, usually the best-paid ferrous grade.
- Halka loha / light scrap: Thin sheets, tins and light cuttings with higher melting loss.
- Kachcha / pakka maal: Informal terms for unprepared versus cut-to-size, furnace-ready material.
- Kata kati: The weighbridge deduction; always ask how it is calculated.
How Kabadi24 buys ferrous scrap in Purvanchal
Kabadi24 buys MS, HMS, cast iron, turnings, rails and structural steel from factories, contractors and plants across Varanasi, Chandauli, Mirzapur, Bhadohi, Jaunpur, Ghazipur, Sonbhadra and other Purvanchal districts. We:
- Inspect and grade the material on-site.
- Quote MS, CI and other grades separately.
- Provide loading crew, gas cutting and trucks.
- Weigh at a certified weighbridge.
- Issue GST invoices and share all slips.
Conclusion
Iron scrap is a volume business where small differences in grading, cleanliness and weighing add up to large sums. Segregate MS from cast iron, remove attachments, keep material dry, and insist on transparent weighbridge weighment. With these steps, your ferrous scrap will sell at the top of the market range.