Poor buying in finished steel affects on ship breaking Scrap prices. In a week's time Re-bar prices dropped by INR 500/MT and Ingot by INR 1,300/MT.
Liquidity crunch and falling construction activities pulled down finished steel demand that directly affected the Scrap market.
Gujarat is a Scrap based market as more than 90% of steel manufacturers use it as raw material. Alang is one of the biggest Scrap cutting yards in the world and also a main source for the state. When demand is normal, around 100-140 ships are converted into Scrap on an average basis in a month. But consistently falling demand resulted almost 50% reduction in ship breaking. During these days around 60-65 ships are converted into Scrap.
Mostly rolling Plates are generated through ship cutting. Rolling Plate cutting offers from 6 Ane to 1 Inch dropped by INR 800/MT in a week's time. Highest loss registered by 4 Ane is decline of INR 1,150/MT W-o-W basis and INR 2,200/MT M-o-M basis. However, melting Scrap prices are not reduced as much as Rolling Plate cutting prices. HMS 80:20 offers at INR 23,400-500/MT today and drop by INR 400/MT in a Week.
Market participants say that “Prices will fluctuate in the same range this month. But we expect market to improve after Diwali.”
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