Indian Scrap Importers seek Offers from US Suppliers

Turkey practiced a bearish buying in last couple of weeks; this made US to offer Scrap to India.

Turkey, a major buyer of Scrap in the global market hesitated to buy Scrap in past days. This was due to its low steel production and depreciation in  currency (Lira), which made import dearer (non feasible). Lack of interest from Turkey made the major seller (US) corrects its offer for Turkey in all over the world. 

US Offer to India

The offers from US have started flowing towards India. US traders are currently offering shredded Scrap (in containers) to India at USD 380-385/ MT CFR Mumbai. Last week offers for shredded Scrap were around USD 385-390/MT CFR.

[su_quote cite=”A source from leading Scrap trading in Mumbai”]Vessels carrying containers of Scrap is to dock at Mumbai port soon with offers for Plates & Structural Scarp (P&S) at around USD 385-390/MT CFR Nhava Seva.[/su_quote]

[su_quote cite=”A participant in the Scrap market based in Mumbai”]Although, US traders are quite reluctant regarding their current offers, the Indian traders/buyers are showing interest to it and have started taking buying positions. Frequent inquiries have begun to pop up in the market, proving the interests of many Indian traders for US Scrap.[/su_quote]

Currently, European HMS Scrap is traded in the range of USD 360-365/MT CFR Mumbai Nhava Seva port, which is quite lower as compared to previous offers. Imports from Europe have increased in past couple of weeks owing to better offers for its HMS grade Scrap. But, many market participants believe that European offers are going to increase from March due to application of GRI (General Rate Increase).

Effect of GRI will mount Offers from Europe

Application of General Rate Increase (GRI) w.e.f 1 Mar, 2014 would increase the freight charges by USD 8-10/MT. The increase in freight would be around USD 200/20 ft container & USD 300/40 ft container (dry) from Europe to Asia. As its impacts, prices of imported Scrap from Europe to India would shot up by USD 10-12/MT.

Dubai nursing Scraps to India

Current offers for HMS (80:20) containers from Dubai are hovering at USD 370-372/MT CFR Mumbai Nhava Seva port. Indian buyers are always interested in Middle-East offers, because of the proximity between the trading countries. Dubai is the nearest source for Scrap to India, taking a delivery period of around 15 days.

Scrap creates Pressure on Domestic Sponge Iron

Due to adverse weather condition in Europe & US, the movement of Scrap was paused for a while, which is now resumed with feasible offers. Traders growing interest towards imported Scrap is creating pressure on Sponge iron prices. 

*Reference Prices CFR Nhava Seva Port