Imported Scrap Offers Unchanged; Indian Buyers prefer to wait

• Offers for HMS 1&2 remain unchanged at USD 370-375/MT. Indian smelters have limited their purchase

• Indian Pig iron prices touched almost 1-year low; making it a preferred option over Scrap

Market for imported Scrap in Mumbai remains sluggish owing to higher imported Scrap offers and sufficient supply of domestic Scrap. At present, imported Scrap is offered at USD 370/MT CFR Nhava Sheva. Whereas, the domestic Scrap is traded in the range of INR 24,800-25,000/MT (basic prices).

One of the smelter at Jalna reported offers for HMS 1&2 from Middle East at around USD 370/MT and USD 365-370/MT CFR Nhava Sheva from Europe. Meanwhile, he urged, “Amid current poor demand and electricity issues, we are running plant for 8-10 hour a day; requiring around 100-120 MT Scrap per day and out of which 70% of the requirement is fulfilled by domestic supply. Currently, we are not highly dependent on imported Scrap.”

On the other hand, steel mills in eastern India prefer Pig iron over Scrap, as its prices have touched almost  1-year low. Current offers for Pig iron are at around INR 24,800-25,000/MT ex-Raipur, Chhattisgarh.

Despite all, some steel mills are showing interest for imported Scrap. It was heard that a Dubai based Scrap exporter has sold 200 MT HMS 1&2 at around USD 374/MT, 100 MT of Blue steel at around USD 407/MT and some quantity of LMS at around USD 350/MT CFR Nhava Sheva to a Maharashtra based Alloy steel manufacturer.

Another Indian importer confirmed to have sold 250 MT of Scrap (Middle East) at around USD 370-371/MT to an Alloy steel manufacturer.

On the other hand in Chennai, buying from mills side remains depressed, indicating poor demand for finished. Mills say there are too many Scrap sellers available in the market as compared to buyers;  showing buying interest at USD 360-365/MT levels for HMS 1&2 (UK origin) which were offered at around USD 375/MT CFR Chennai/Tuticorin port. 

But on contrary, importers at Chennai port explained, “At present, material (Scrap) is not readily available in Chennai market; stock at port has started depleting. Now, the scenario is that the mills have to purchase imported Scrap at any prices, available in the market.”

The same source confirmed about a UK origin deal of 1,500 MT premium grade Turning Scrap at USD 363/MT CFR Goa. Some deals of Turning boring were also heard to settle at around USD 349/MT CFR Mundra port. 

Even though, being aware of on-going bullish trend in international market, domestic mills are not booking Scrap at the current level. They believe Indian market will continue to remain bearish for another  1-month till the festival ends.