Tuesday, March 15,
Indian steel manufacturers are caught in a thought spot with global scrap prices reaching higher levels of $480/MT..* Market for finished product is trying to tackle the weak demand. Manufacturers have tried every trick in the book from production cuts to holding the prices at various levels. But nothing has helped so far and demand never showed any signs of improving. It looks like that mill owners have given up and are sitting on the side lines waiting for the market to take its course.
Steel mills are not stocking raw materials and most of the mills do not even have a week’s inventory with them. Scrap market which is generally a seller’s market and it has seen no demand from these mill owners. The stock piles are lying idle in the stock yards.
It was reported yesterday that few containers of scrap arrived in Mandi Gobindgarh. But no one showed any interest in it and the prices got corrected by nearly Rs 500/MT in the same day. It is quite significant considering the nature of scrap market and the trend in global scrap prices.
Traders don’t see any hope in the immediate future. A trader based in the region told us that “there are no buyers at any price levels. Mill owners have gone on voluntary shutdowns as they are not able to sell finished products. Moreover the recent quake in Japan has already hurt the feeble market sentiments”.
Chennai also has got the same story to tell. Steel mills had previously stocked up some scrap ahead of the union budget in anticipation of a hike in excise duty. But it did not materialize and this brings the fear of distress selling for mill owners. No one is buying scrap in the region since the beginning of the month and the situation is not likely to improve in the near future. Scrap traders told us “we are not importing any more scrap till the stocks in our yard find takers”
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