Falling India currency and sluggish demand lowered buying interest for imported Scrap.
Imported Scrap offers for shredded Scrap from US & Europe have further slipped by USD 2-3/MT this week. Currently, delivered price is at USD 403/MT CFR Nhava Sheva. But, longer delivery time from US to India led to preference for Scrap imports from Middle East countries.
Arrival of monsoons led to slowdown in demand for finished products, which has decreased the demand for Scrap. Mills are currently maintaining low levels of inventory for Scrap, which might further build pressure on Scrap prices.
Unfavorable exchange rate is also creating pressure on Scrap imports. INR has depreciated by 1.1033 against USD in a week’s time. (Today, USD 1 = INR 60.36)
“Decline in construction activity and low demand for finished & semi finish may lead to correction in Scrap prices. Imported Scrap offers are likely to correct by USD 15-20/MT in next two weeks,” speculates an importer based in Mumbai.
South Africa, which is among top Scrap exporters to India, is currently offering HMS 80:20 at around USD 385-390/MT CFR Mumbai and HMS 70:30 at around USD 380-385/MT CFR Mumbai.
Similarly offers from Middle-East for HMS 1&2 remain stable at USD 390-392/MT CFR Mumbai.
[su_pullquote align=”right”][su_note note_color=”#e4e4de” text_color=”#0a0a0a”]India is one of the largest Scrap importers in the world, which imported around 4 MnT of melting Ferrous Scrap in FY14.[/su_note][/su_pullquote]
Sponge iron prices corrected by INR 1,200/MT last week and as per some market participants, shortfall of Iron ore lumps from Odisha will continue for a brief period.It should be noted that the mining operations will take time to resume after the Supreme Court’s order for suspension of 26 mines running under second deemed renewal in Odisha.
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