Alang, Gujarat — Know as the biggest graveyard of ships in India & second largest in the world, reported six month low in melting scrap offers over rising scrap inventories on seasonal poor demand, logistic concern & declining steel prices.
As per SteelMint assessment, currently Melting scrap prices in Alang, Gujarat stood at around INR 24,000/MT, which is similar against price range during Jan 2018. On monthly comparison the prices slump about INR 2,000/MT (USD 29).
The key reasons :
— Transportation strike: All India Motor strike hampered domestic transportation for more than a week during July-end. As per ship breakers in Alang logistic issue continues in the market as transporters charging high freights, hence buyers halt purchases and are in wait & watch mode.
A ship breaker based from Alang, Gujarat stated, “Local transporters strike continuous on demand of increase freight charges by about INR 300-500/MT than the earlier they were charging. After the strike was called off by all India motor transporters, demand-supply chain of raw materials got disturbed which hampers the trades.” he added.
— Declining global scrap prices: Ferrous Scrap prices slump globally on limited bookings by major scrap consumers in International market. Imported scrap offers in India down abut USD 20/MT during July and the offers assessed at around USD 365/MT for Shredded grade, USA – origin.
— Falling steel prices on Seasonal slow down: Indian steel prices crashed by INR 3,000-4,000/MT on monthly average basis due to seasonal poor inquiries. The stockiest have limited purchases as the construction works remains slow in the season.
— Improved availability of scrap: As per the data compiled by SteelMint, Indian scrap imports during since Jan to May’18 remain healthy & during May’18 the imports recorded the highest volume at 466,382 MT.
Further, scrap prices in the major key markets have declined over falling steel prices and better supply . HMS (80:20) basic prices assessed at INR 25,000/MT (USD 363) ex-Mumbai, Maharashtra & INR 22,700/MT ex-Chennai, Tamil Nadu; excluding GST at 18%.
Outlook
The Ship breakers in Alang mentioned that scrap prices have bottomed out currently and likely to observe upward corrections in coming days.
According to them local transportation issue will be settled in the current week, this will lead to better supply movement. Also, the major manufacturers didn’t have sufficient stock of scrap to run their mills.
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