Melting scrap prices have hit an all-time high in major Indian markets owing to the continuous increase in bids amid limited availability of scrap in domestic markets and limited imported scrap transactions. Other factors that have attributed to this rise are increasing substitute product prices mainly sponge iron and pig iron.
SteelMint learned from trade participants that market acceptance would breach existing levels as buyers in different regions are holding procurement owing to strengthening offers but sooner or later they would follow the market trend which is already on upside, as per our data.
However, the Jalna market couldn’t catch the upward price movement despite surging semi-finished and finished steel prices due to landing imported scrap consignments in the last couple of weeks which was booked around two months back.
Gujarat-based market sources shared that a few major mills based in Kandla have reduced their production level where finished steel future bookings have slightly come down compared to the beginning of the month.
Prices
Further, in the southern region (especially Chennai market) has noticed a disparity between bids and offers gap is as much as INR 600-800/t. Key buyers are bidding in the range of INR 28,800-29,300/t but not getting appropriate quantities as per the requirement and shared market range as INR 29,400-29,900/t. But a few specified trade contributors are still at higher range by INR 400-600/t for HMS (80:20) grade with a yield of 93-94%, loose material (DAP).
Outlook
Market sources are of the opinion that prices are less likely to come down sharply, considering hike in global scrap offers. Turkish imported scrap prices have hit eight-years high in the recent deal.
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