Indian Domestic Scrap Prices Rise in line with Imported Offers

Indian domestic scrap prices have continued to increase in line with rising imported scrap and domestic billet prices.

Indian melting scrap prices surge as global offers skyrocket. The domestic scrap prices increased by INR 1,000-1,500/MT (USD 15-24) in last one month, where as imported scrap prices rose by USD 20-25/MT during the same period.

Average prices for imported HMS 80:20 (From UAE) stands at USD 308/MT, CIF Nava Sheva (Mumbai), where as average prices for similar grade in domestic market are recorded at INR 21,100/MT (USD 327) on Ex-Mumbai basis. Scrap prices in other parts of the country also increased in similar proportion.

Scrap plays an important role in India’s steel production. Scrap contributes about 20% of feed for steel makers. India imports around 5 million tonnes of scrap ever year and generates over 14 million tonnes every year.

Scrap is largely consumed by steel makers located in Southern, Western & Northern region of India, which consumes almost 70-80% of total scrap.

What is driving global prices?

Global scrap prices are moving up on account of less availability of Chinese steel in global market. Chinese government had directed to cut down steel production by 50% from Nov’17 to March’18, in several key producing regions in order to curb pollution.

This has resulted in sharp fall in steel exports from China and forcing steel mills in other parts of the world to increase their own steel production.

HMS 80:20 prices in Turkey, which is the largest importer of scrap, has reached USD 343/MT CFR levels, which is higher by USD 38/MT from the last month.

Reference prices as on 6th December 2017

Basic prices in INR/MT & excluding of GST @ 18%
Source: SteelMint Research