Indian Steel Mills Book Bulk Scrap Vessels

As per recent conversations with market participants, SteelMint learned that Indian scrap importers have booked few bulk scrap import vessels in last 15-20 days at slightly corrected prices. However, buying interest remained subdued for containerized scrap and bookings remained sluggish on the effect of currency depreciation and concerns over arriving monsoons.

According to sources, Gujarat based major scrap importers have collectively booked two bulk mix scrap cargoes comprising 30,000-35,000 MT volumes each from USA. These bulk vessels booked at an average price in the range of USD 385-390/MT, CFR Kandla during last two weeks’ time in India. Delivery for these vessels expected towards mid of July’18.Prior to this, a southern India based leading long steelmaker booked around 28,000-29,000 MT mix cargo last month.

Price assessment of UK/Europe origin containerized Shredded stood at USD 383-388/MT, CFR while offers for the same from USA gauged at USD 387-390/MT, CFR Nhava Sheva. South African HMS 1&2 assessed at USD 370-375/MT and Dubai HMS 1 at USD 373-378/MT, CFR Nhava Sheva. Minor trades for West African and European HMS concluded in the range of USD 350-365/MT, CFR depending on the quality of scrap in containers.

Domestic scrap prices witnessed mix trends in most of the regions in India. HMS (80:20) prices assessed at INR 27,400-27,700/MT in Mumbai and INR 26,500-26,700/MT in Chennai. (Basic prices, GST @ 18% extra).

What could have happened in Indian imported scrap market?
Since last one month, Indian steelmakers were preferring Sponge iron (DRI) or domestic scrap over imported. The easier and cheaper availability of sponge iron had kept importers away from booking bulk scrap amid high offers for imported scrap which were ranging around USD 395-405/MT for bulk mix grade cargoes from USA and UK. But this situation turned as soon as the scrap demand from major importers like Turkey, Pakistan and Bangladesh sharply slowed down on Ramadan festivals holidays.

The reversed pressure might have created on suppliers to sell amid increasing stocks with them. Increasing supply side and fall in demand have led prices to move down and the bulk offers from USA and UK came down in the range of USD 385-390/MT, CFR India which stood in line with prices for containerized scrap. Thus, importers could have turned active for imported bulk scrap bookings in India.

Indian Bulk scrap imports fell 45% Y-o-Y in FY18 – During FY18, India imported total 322,940 MT of ferrous scrap in bulk cargoes as against 586,200 MT ferrous scrap bulk imports recorded in FY17. Bulk scrap imports registered 45% Y-o-Y fall in FY18.

Bulk vessel line up data –

Provisional data updated till 14th May’18
Source: SteelMint vessel line-up and customs data