Indian Scrap offers by global players witness a fall due to decline in demand from Turkey and depreciation in Turkish Lira
After a brief period of hibernation, Scrap industry is waking up for some activities due to better offers seeping from global players. Turkey, one of the major Scrap importers has seen some correction in its prices.
Last week, a deal of HMS (80:20) from US settled at USD 354/MT CFR Turkey. Currently, Turkey is less interested in European Scrap, as they are getting slightly premium grade products from US at a good price. Europe offers Scarp to Turkey at around USD 322/MT FOB Rotterdam. Whereas, US offers to turkey has steeply fallen from USD 383/MT to USD 354/MT between 30 Jan &14 Feb, 2014.
The Currency Factor
Scrap import depends a lot on currency volatility. Turkish Lira depreciated sharply against USD in last 15-20 days. This has restricted the feasibility of Turkish buyers to purchase Scrap. Moreover, some traders speculate that Turkey might have cut down its crude steel production which led to a shortfall in demand. Turkish Lira is trading at TYR 2.2 against USD. A comparison of HMS grade Scrap prices with Turkish Lira (TYR) is as shown below.
Indian offers from Global Sellers
Indian importers are now seeing good opportunities to import Scrap owing to fall in demand from Turkey. Current offers for HMS grade Scrap to India is USD 370/MT CFR. As per our sources, the deal is expected to be settled at USD 365/MT CFR. US traders offer steel turnings grade Scrap to India at around USD 340/MT CFR.
Indian offers for HMS Scrap from Poland are hovering at USD 375-377/MT CFR, whereas from Chile it is USD 378-380/MT. Shredded Scrap (211) from New Zealand is offered to India at USD 370/MT CFR, but importers are willing to settle deals at USD 365/MT CFR.
Demand for Scrap in India is at around 12-13 MnT, but domestic market has not been able to cater to the growing needs of Indian Scrap consumers. Many Scrap based manufacturers in North India are finding it difficult to operate their plants owing to shortage of Scrap. Feasibility of scrap import might prove to be a boon for Indian Scrap consumers.
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