Scrap suppliers keep their offers firm to Indian market amid low supplies, even as falling Sponge Iron and Billet prices hit Indian buying interest.
Scrap suppliers continued to keep their offers strong this week to India encouraged by tightening supplies due to improved demand from rest of the world. Also, the debatable inspection norm implemented by Indian government in April’15 as a part of Foreign trade policy 2015-2020 has been keeping suppliers hesitant towards export to India.
Currently HMS (1&2) offers from Europe to India are in the range of USD 275-280/MT, South Africa at USD 280-285/MT, Africa at USD 260-265/MT and Middle East at USD 295-300/MT, CFR India basis.
Shredded scrap (ISRI 211) of US/Europe origin were also heard to be strong at USD 295-305/MT, CFR India. A deal of 500 MT US origin Shredded scrap was heard to have settled just above USD 295/MT, CFR Chennai, India. The shipment is expected to take place by first week of May’15.
Whereas Busheling scrap (ISRI 207) was heard being offered by Brazil & Japan at USD 300-305/MT, CIF India.
PSIC still a Concern
Though the authority has currently suspended the new (disputed) PSIC (Pre-shipment Inspection & Certification) procedure introduced in Foreign Trade Policy 2015-2020, buyers are still watchful. As a result buyers & suppliers have kept their trades on halt and await final decision from DGFT, which is expected to be announced in a day or two.
Falling Sponge Iron and Billet Prices
Continuous fall in Sponge iron & Billet prices remains a concern for Scrap traders.
With strong speculation about fall in Iron ore price on resumption of 26 mines in Odisha is keeping the domestic buyers away from bulk purchases. Hence, the market is currently shy towards any purchase of Scrap as it has witnessed sharp cut in Ingot/Billet prices upto INR 500/MT W-o-W.
However, Scrap suppliers, having recently undergone General Rate Increase in the freight of containers carrying Scrap, are nowhere willing to narrow down their offers. According to them, they are keeping prices high to cover the basic cost engaged in shipping lines.
Global scrap prices as on 23 Apr’15
| Delivery Terms | Grades/ Origin | Prices | W-o-W Change |
| CNF India, Chennai | HMS(80:20),Europe | 275-300 | 0 |
| CNF Mumbai, India | HMS(80:20),Europe | 275-300 | 0 |
| HMS-1,Middle East | 305-310 | 0 | |
| HMS-1&2,Middle East | 295-300 | 0 | |
| HMS-1&2,S.Africa | 270-275 | 0 | |
| Shredded,Europe | 300-305 | 0 | |
| Shredded,US | 295-300 | 0 | |
| Busheling, Japan | 300-305 | Nil | |
| Busheling, Brazil | 305 | Nil | |
| CNF Taiwan | HMS(80:20),US | 230 | – 6 |
| CNF Turkey | HMS(80:20),US | 265-270 | + 7 |
| FOB Rotterdam, Europe | HMS(80:20),Europe | 230-240 | + 6 |
Source: SteelMint Research
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