Subdued demand and falling steel prices in Indian market have led furnaces prefer to wait & watch.
Indian buyers are very selective for purchasing imported Scrap on the backdrop of falling steel prices and availability of domestic Scrap at cheaper rates. However, Scrap exporters even believe that prices may sustain at current levels owing to improved demand in other nations.
“Rising demand in international market has resulted in Scrap price hike these days. Viewing the bearish outlook in India, we are shifting Scrap offers to Bangladesh, Pakistan, Indonesia and Turkey,” said a Scrap exporter based in Middle East.
Moreover, current offers for HMS 1&2 in the international market are still at premium levels of USD 360/MT FoB Rotterdam. Turkey, the largest buyer of imported Scrap, has resumed the market with the end of Ramadan and started aggressive buying. This has created a temporary shortage and pulled up the prices to USD 388-390/MT CFR Turkey in a weeks’ time.
Shredded Scrap offers were heard to be at USD 400-405/MT CFR Chennai but buyers are asking at USD 390-395/MT (which was not workable for suppliers). US & Europe have assertively started to raise Scrap offers, after realizing strong buying from Turkey. Currently, Scrap imports to India seems viable only from West & South Africa, which would cost around USD 365-375/MT CFR Chennai.
Bangladesh, which is also a Scrap based market, is ready to pay USD 380-385/MT for HMS 1&2, but European sellers are not interested to exchange it at these levels. Along with Turkey; Taiwan & Indonesia are also depicting strong buying sentiments in the market.
“Bullish demand in neighboring countries will definitely change the exporters’ preference. HMS Scrap offered from Middle East to India, which is even negotiated at USD 365/MT levels, is easily purchased by Pakistan mills at USD 372-373/MT CFR. This price gap will surely hamper our imported offers and end up with increase in Scrap prices,” said a Smelter based in Jalna.
After examining such a bullish outlook in the international market, few Indian traders have lost the hope of further price correction in imported offers. At present, it seems that prices may not correct in near-term, until other countries buying appetite diminishes.
Appreciating Indian Currency from past couple of days is considered as positive sign for importers and it may activate the dull import market of India. In addition to it, strong Sponge iron prices is also providing support to market and creating space for Scrap in India.
Trade Alerts
1. Blue Steel settled at USD 404/MT CFR Mundra port
2. HMS 1&2 from Middle East settled at USD 367/MT CFR Nhava Sheva
3. South African HMS 1&2 is offered at USD 370/MT CFR Nhava Sheva
4. Germany based exporter is offering Shredded Scrap at USD 403-405/MT CFR Chennai
5. European exporter is offering Shredded Scrap at USD 390-392/MT Nhava Sheva
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