Indian importers keep their purchases intact for imported Scrap owing to rising Scrap demand and appreciation seen in Sponge iron (DRI) prices in the domestic market.
SteelMint assessed that current offers for HMS 1&2 from Middle East are hovering in the range of USD 390-395/MT CFR Nhava Sheva and HMS-1 from Oman at around USD 400/MT CFR Nhava Sheva.
“Buying interest from small smelters is strong as DRI prices in domestic market have gone up by INR 1,000/MT (USD 16/MT) in a month’s time. With Indian rupee trading at 60-61 levels, imports are viable,” said a Scrap importer based in Western India.
Currently, Scrap based steel markets in India are in dire need of raw materials. Shortage of Scrap in the market, coupled with currency parity has seen aggressive buying interests from Scrap importers. This urgency of demand is met by Dubai Scrap traders since the delivery period is lowest as compared to other Scrap supplying nation. The urgency in demand has led to increase in offers from Dubai.
“There is shortage of Scrap in the market and we need it urgently to meet our production needs. For this reason, we are going for imports from Middle East Countries. We have recently purchased HMS 1&2 from Dubai at USD 390/MT CFR Mumbai,” said an Electric Induction furnace owner at Mumbai.
Moreover, numbers reveal that imports from Middle East countries have peaked to 0.69 MnT in FY14.
Scrap Importers incline towards Middle East in FY14
It is quite evident that UAE’s proximity to India and quick delivery are the major reasons for importers to book orders from this country. Usually importers preferred to import Scrap from UK & US as Scrap from these countries were considered to be of superior quality. But, this trend has seen a changeover.
[su_pullquote align=”right”][su_note note_color=”#e8e7e3″ text_color=”#131311″]India had imported 246,350 MT of Scrap from UAE and 123,600 MT from UK in Q4 FY14. [/su_note][/su_pullquote]
UAE has replaced UK to be one of the highest import destinations for India. This financial year, India imported 693,620 MT from UAE as compared to 637,600 MT from UK and this gap in the import figures between these two countries started to widen with the beginning of 2014. (Provisional data)
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