India: Imported scrap prices fall amidst drop in global offers, volatile steel prices

India’s imported scrap trade remained slow despite the fall in offers. However, a few deals for UAE-origin and West Africa-origin HMS were noticed throughout the week but at lower offers. Although domestic steel prices dropped w-o-w, they remained volatile through the week. Steel production cuts amidst power outages have also kept mills less active in imported scrap bookings.

The cost of production is being propelled upwards by power and coal costs while demand has receded due to the sharp rise in finished prices. As a result, such mills across the country have no option but to curtail production. Many have already started doing so to combat present challenges.

Recent deals & offers

• Fresh offers for UK/EU-origin shredded are being quoted at $640-645/t CFR Nhava Sheva levels, down by a further $5/t w-o-w. Small quantities have been booked at $650/t CFR basis earlier in the week.
• Dubai-origin HMS1 has been booked at $580-582/t in the second half of the week, while 1,000 t of HMS 1 was booked at $590/t level earlier in the week.
• Other western India-based steel mills procured 1000 t UAE HMS 1&2 (80:20) at $570-575/t basis.

A few more deals for PNS and fabrication material from UAE have been booked actively this week. Mills look for short sea distance cargo from Mauritius, Yemen, and West African, considering the short delivery period and cost-effectiveness.

Regional scrap prices remain volatile: Domestic scrap prices fluctuated across markets. At the start of the week, prices climbed amid a correction in coal offers and improved finished steel movement. On the contrary, prices softened from mid-week due to power cuts and limited demand for raw materials.

SteelMint’s assessment for HMS (80:20) was at INR 45,000/t DAP ($589/t) Mumbai, up INR 1,500/t ($20/t) w-o-w. Prices in Jalna were assessed at INR 45,700/t DAP ($598/t), up INR 1,400/t ($18/t) w-o-w.

Rebar prices fall towards week’s close: Induction furnace rebar prices fluctuated in major markets. Buyers remained inactive owing to uncertain market trends and fluctuating semi-finished steel prices over the last couple of days. In a few locations, manufacturers observed slight selling pressure and were therefore forced to offer trade discounts that varied region-wise.

Domestic IF rebar (Fe 500) prices stand at INR 65,800/t ($860/t), moving up sharply by INR 1,400/t ($18/t) from INR 64,400/t ($842/t) exw-Mumbai. However, prices witnessed a d-o-d drop of INR 500/t today.

Outlook: If the government increases tariffs, then secondary mills will have to further curtail production. This will put supply under pressure and further increase the cost of steel and push downstream users to the sidelines.