Imposition of MIP has driven up Indian steel market; scrap market also followed suit and offers increased by USD 10-15/MT.
After the government on 5 Feb’16 announced minimum import price on steel products, Indian steel market has shown improvement by INR 2,000-2,500/MT during last 4-5 days. The domino effect of price rise in semi finish and finished product was easily seen in scrap offers (raw material) as well.
Scrap offers for HMS 80:20 and Shredded, which were in the range of USD 180-185/MT and USD 195-200/MT, CFR India last week respectively, are now assessed at USD 190-195/MT and USD 205-210/MT, CFR India, reporting an increase of USD 10/MT.
Inquiries for Middle East scrap were heard to have increased on the backdrop of stimulated domestic sentiments. Offers for HMS (23 tonnes loading) inched up to USD 200-205/MT and HMS (25 tonnes loading) to USD 210-215/MT, CFR India.
Scrap participants are actively taking position for Middle East scrap, but are still skeptical about booking scrap from Europe and US as every participants are aware of the fact that currently the market is purely sentiment driven.
Continuous depreciation in INR against USD is also adding to the resistance. Rupee as on 9 Feb’16 was recorded at 68.12 against USD.
Outlook
Participants are hesitant to provide the future prospects. Scrap prices currently are totally subjective, and are dependent on movement of ingot/billet prices in domestic market.
Global Offers as on 9 Feb’16
| Particular | Size/Grade | Prices in USD/MT | W-o-W Change |
| CNF India | HMS(80:20), Europe | 190-195 | + 10-15 |
| HMS-1, Middle East | 210-215 | + 10-15 | |
| HMS-1&2, Middle East | 200-205 | + 10-15 | |
| Shredded, Europe | 205-210 | + 10-15 | |
| Shredded, US | 205-210 | + 10-15 | |
| CNF Taiwan | HMS(80:20), US | 150 | 0 |
| CNF Turkey | HMS(80:20), US | 173-177 | + 5 |
| FOB Japan | Busheling Shredded | 175 | 0 |
Source: SteelMint Research
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