India: Imported Scrap offers Stable; Buyers seek Credit

Imported Scrap offers to Chennai remain stable but buyers seek discount or credit extension.

Buying interest in Chennai is seen at USD 10-15/MT lower to the offers floating in market. Scrap market for imported as well as domestic remain flat here.

Currently, Scrap market at Chennai, which is one of the highest Scrap importing regions in India, looks quiescent; witnessing low trade in past few days. Several reasons were kept responsible for it. Few participants reported sluggish demand of finished product has resulted to this; some blames the Scrap stockpiles at port, which is making mills carefree about the availability and the rest say cash crunch as the root cause.

Inactivity in construction sector has harmed the complete chain. Slowdown in construction activities has affected the real estate sector leading to cash crunch among finished and other downstream product dealer. Ultimately, the buyers run in shortage of money and avoid more purchase resulting to sluggish demand. Meanwhile, manufacturers try to en-cash their blocked capital by selling at lower prices.

As we are aware that credit sales are an important factor deciding trades, especially when the market is badly affected by cash crunch. Market participants shared, buyers here are preferring more of domestic purchase for the sake of credit facility provided by the domestic sellers.

One of the Scrap importers shared, “I had offered UK origin Shredded Scrap at USD 405/MT CFR Chennai, which is expected in 10 days. A buyer was interested at USD 400/MT CFR but on a condition of credit purchase facility of at least 30 days.”

HMS offers here are hovering at the level of USD 380-385/MT but no trades are being heard at these levels. Below are few offers mentioned following with the buying interest seen at these levels:

  * As informed by buyers and sellers