India: Imported scrap offers inch up, hike in steel prices lend support

Imported scrap prices to India showed a recovery recently after witnessing a fall in the past one month. The recovery was on account of the rise in semi-finished and finished steel prices in India. That apart, there has been resumption in active trade in neighbouring Pakistan. Market sentiments in India have also turned supportive.

 Fresh offers

• Offers for the UK/EU-origin shredded in containers stood at $535-540/t CFR Nhava Sheva, up by further by $5/t w-o-w. However, no firm bookings were reported.
• A western India-based steel mill bought 1,000 t UAE-origin HMS 1&2 (80-20) at $445-450/t CFR Kandla basis earlier in the week.
• However, towards the weekend, offers for Dubai-origin HMS (80:20) and HMS 1 stand at $470/t and $475/t CFR Nhava Sheva respectively, up $10/t w-o-w.
• Meanwhile, West Africa-origin HMS is now at $455/t, up by around $5/t w-o-w.

Market highlights

• Domestic scrap prices rebound: Melting scrap prices witnessed a hike across markets w-o-w. Prices increased tracking higher raw material (coal) prices and a surge in sponge iron and semi-finished steel prices. Healthy trade in semis may keep scrap offers supported in the near term, sources said. SteelMint’s assessment for HMS (80:20) was at INR 36,400/t ($490/t) DAP Mumbai, up by INR 600/t w-o-w while prices in Jalna were assessed at INR 36,000/t DAP ($484/t), up by INR 1,000/t w-o-w.
• Domestic billet prices up: Rising billet prices continue to support sponge prices, increasing by INR 800/t w-o-w to INR 43,600/t exw-Raipur. Sponge iron P-DRI (FeM 80%) prices rose by INR 1,050/t w-o-w to INR 30,950/t ($416/t) exw-Raipur, hitting a one-month high.
• IF-grade rebar prices move up: There has been improvement in buying enquiries and spot trading activity. Rise in raw material prices in key markets, along with adequate booking orders held by manufacturers for this week, indicate that prices may remain supported in the coming days.  Prices increased by INR 900/t w-o-w to INR 50,600/t ($680/t) exw-Mumbai.

Outlook 

Market sources expect trade activities to pick up in the coming week and prices to firm up, given the supportive steel market sentiments.