Imported Scrap offers to India rise on Strong Currency

Imported Scrap offers to India rose by USD 15/MT over strong currency and high offers in global market.

Imported Scrap prices  have risen in Indian market owing to strong Indian currency, which has appreciated around 3% in last few trading sessions and rising offers in the global market.

Sources tell SteelMint that current offers from Middle East are hovering in the range of USD 380-385/MT CFR Mumbai based on quality & delivery, which has gone up by almost USD 15/MT from last month. Recently, a vessel carrying 8 containers of HMS 1 from Oman is to be delivered to Nhava Sheva Mumbai next week. The deal is heard to be settled at USD 383/MT CFR.

Indian importers are inclined towards Middle East offers. As per few market participants we talked, prompt delivery from Middle East is one of the major reasons for frequent transactions. It takes maximum of 7-9 days to deliver the material from Middle East to India. Currency fluctuation is also an important factor while trading internationally. An importer based in Mumbai opined,

[su_quote]Proximity of Dubai to India makes transit time shorter and the risk of currency fluctuation is minimized.[/su_quote] 

 US offer unviable for Indian Importers

Offers from US have appreciated steadily in past few days owing to speculation of price rise in US domestic market. The current offer of US shredded Scrap is at USD 400-405/MT CFR Mumbai, which is not feasible for Indian market, said an importer based in Mumbai.

 International Offers up on Strong Buying from Turkey

International offers has also boosted up to USD 372-376/MT CFR since major buyers in Turkey have again started procuring Scrap at higher rates due to growing buyers appetite. These offers are mainly from US & Europe. Similarly offers to South Korea, the world’s second largest Scrap importer have increased by few dollars.

 Election Sentiments strengthen Indian Currency

The positive sentiments for upcoming general election to be held in April have triggered inflow of FII money, which has led to steep appreciation of Indian currency. Parities seen in exchange rates are making offers quite attractive for Indian Scrap importers and feasible to import the material.

 Market participant speculates that the domestic Scrap prices in the month of April & May are expected to come under pressure owing to rise in Scrap imports and improved supply of Iron ore in the domestic market. Iron ore mines are expected to resume operations next month which may result to some correction in Sponge (DRI) & Pig iron prices.

Current Offers for Imported Scrap