India: Falling domestic steel prices weigh down imported scrap bids

The imported scrap market in India witnessed a slowdown later this week, owing to a drop in the prices of semi-finished and finished steel items. Further, sponge iron and domestic scrap prices also moved down, which pulled down imported scrap bids by Indian mills.

Considering the negative sentiments in the domestic market, bids for imported scrap have come down considerably. However, some global scrap suppliers showed resistance to lowering the offers. Meanwhile, container trade in neighbouring countries also remained slow. 

Recent deals and offers

• Shredded offers are heard at around $550-555/t, CFR Nhava Sheva, but no confirmed deal was heard as Pakistan-based mills actively booked the material at $552-555/t, CFR PQ. However, some offers were heard on the higher side of $560/t.
• Offers for Dubai-origin HMS 1 and HMS 1&2 (80:20) are being quoted at $500/t and $495-500/t CFR levels respectively, up by $5-10/t w-o-w. Buyers were not willing to pay these high price levels.
• Earlier in the week, deals of South African HMS were heard at $500-505/t, CFR Chennai
• West Africa-origin HMS offers were heard at $480-490/t CFR India levels, after deals seen early this week at $505/t CFR Chennai.

“The market has gone soft this week and imported scrap inquiries have slowed down in the past couple of days,” said a trade source.

Domestic scrap prices fall on bearish market sentiments: The key factor behind the marginal correction in prices is the lack of movement in finished steel products, which impacted prices of sponge iron and semi-finished steel. SteelMint’s assessment for HMS (80:20) was at INR 37,900/t ($504/t) DAP Mumbai, down by INR 400/t w-o-w, while prices in Jalna were assessed at INR 38,500/t DAP ($512/t), down by INR 500/t w-o-w.

Weak sentiments pull down billet, rebar prices: Weak market sentiments and falling semi-finished steel prices have slowed down activity which compelled traders to offer more attractive discounts to liquidate material. SteelMint’s daily steel billet index is assessed at INR 47,000/tonne (t) exw-Raipur on 11 Feb’22, lower by INR 1,700/t w-o-w. However, the disparity was observed in offers floated by the manufacturers. Domestic IF-route rebar prices stand stable at INR 56,400/t ($749/t) exw-Mumbai. Rebar prices may be further influenced by the raw material price movement.

Outlook

Market sources are of the opinion that if finished steel prices continue to remain under pressure, bids for imported scrap will surely decline further. However, it would be interesting to see if suppliers lower the offers, given the active buying at increased prices seen in Turkey.