Imported HMS Scrap assessed at USD 325-330/MT CIF India

Containerized Scrap offers to Indian market have shown further correction of USD 5/MT. HMS 1&2 offers from Europe fall further to USD 325/MT for Nhava Sheva and USD 330/MT for Chennai. Whereas, Middle East suppliers are offering HMS 1&2 at USD 328-329/MT CIF Nhava Sheva.

In search of bottom limits of market, Scrap prices have further fallen to USD 325/MT levels. Current offers from Europe were around USD 325-330/MT CIF India. Deals were mostly heard to settle at slightly below USD 330/MT. Whereas, few best negotiated deals were even settled at USD 320-325/MT CIF Nhava Sheva. Currently, market is witnessing panic selling; open offers are at USD 325/MT, but it seems USD 320/MT is also an acceptable quotation for Scrap sellers.

A participant in Chennai urged, “There are fair offers of HMS 1&2 at USD 330-335/MT in market, but the market sentiments are so poor that buyers are assertively quoting at any levels. Scrap can even be available at USD 320-325/MT if skillfully negotiated.”

Surprisingly, the material at stock (also called ready material), which are almost USD 10-15/MT premium to booked material, are offered at equivalent rates to that of booked consignments. Manufacturers, who are in need of material, are directly purchasing the ready material from the port.

Studying the continuous fall in market since past few weeks, buyers have become very cautious while booking and some have put them into cold storage.

An importer shared his one of the galling experience, “Few days back, we booked ready HMS 1&2 at USD 337/MT CFR Chennai and 2 days later after completion of formalities, we were getting same grade offers at around USD 334/MT CFR Chennai. Currently, market is so erratic that we are hesitating to take positions. Fall by USD 3-4/MT in a day makes large difference in trades to us.”

Scrap prices are expected to fall further viewing the endless price fall in Seaborne Iron ore offers. Iron fines last week witnessed a fall of USD 4/MT and being traded at USD 76/MT CNF China (Fe 63.5/63).

Another Scrap importer mentioned to have sold 16 containers of HMS 1&2 from Middle East at USD 328-329/MT CIF Nhava Sheva to an Alloy Steel manufacturer. He also stated that demand has been really poor and people will not be surprised if prices come down to USD 320/MT levels.

Participants in Chennai reported few mills in South are in the verge of closing. The source also urged, closing cost was lower than manufacturing Billet at current situation.

Few market participants, earlier speculated Scrap prices to rise in winter owing to pre-stocking taking place before holidays in Europe & US. But now, witnessing the major drivers such as Iron ore prices and Billet market, it is difficult to be optimistic about the market.

Global Scrap Prices (in USD/MT) as on Week 46 ( 10 Nov – 16 Nov, 2014)