Scrap prices in the International market
having corrected over $10-12/MT last week and the Rupee recovering against the
Dollar, does it make sense for Indian scrap importers to take their positions?
Opportunity
Scrap Offers (containerized) to Indian have
also come down to $390/MT CFR Mumbai for HMS 1-2 and around $405/MT CFR
Mumbai for Shredded. Government's decision to open foreign
direct investment for few sectors followed by disinvestment and
hike in fuel prices have supported Rupee against Dollar (Rupee has gained over
2% last week).
This makes a good opportunity for Indian
importers to take their positions in the imported Scrap market.
Rising Iron ore and Scrap prices in the
Chinese market might push international scrap prices in near term.
Risk
The Indian government has a history of
flip-flopping on policies in the face of political pressure and implementation
might also take time.
Moreover, increased availability of Pellet
Sponge in the market might keep the demand for Scrap low and high prices may
not be acceptable to Indian steel makers.
With high production cost, power prices will
remain high. This will subdue Scrap demand and prices.
Overall, experts believe it makes sense to
make purchases in imported scrap market looking at improved demand.
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