Imported scrap demand to Indian market has picked up slightly this week owing to rising steel and sponge iron prices in domestic market. Indian steel mills are expected to resume imports in coming weeks.
Prices of containerized heavy melting and shredded scrap to India have also gone up, viewing the higher prices in other South Asian countries like Bangladesh, Pakistan, Indonesia and Vietnam.
Indian buyers, who were waiting for prices to correct further, have begun to consider buying material as most of them are running with low inventories.
Containerized HMS 1&2 (80:20) from Europe is currently being offered at USD 220-225/MT and Middle East at USD 220-224/MT, CFR Nhava Sheva. However, buying interest is observed at USD 5-7/MT lower than the offered price.
Meanwhile, shredded scrap offers are assessed at USD 235-240/MT, CFR India. Some trades of 8,000-10,000 MT were reported to close at USD 240/MT, CFR South India.
Higher Sponge Iron Prices
Indian sponge iron prices pick up in last few weeks due to rising imported coal prices. Current offers are hovering in the range of INR 12,100-14,100/MT (excluding Excise of 12.5%) in Raipur (central India), which is the largest producer of merchant sponge iron in the country. Prices have gone up by INR 600-900/MT in last one month.
Indian Import Falls in August
Ferrous scrap import from India during the month of Aug’16 dropped (3%) over the previous month. It is the fifth consecutive month that the steel scrap imports have noticed a downfall.
The country’s total scrap imports during Aug’16 amounted to 318,000 MT. Imports were down marginally by 3% as compared to Jul’16, which were recorded at 328,500 MT. Indian scrap imports for a period of Jan-Aug’16 totaled at 4,012,000 MT.
Risk Factor
Only risk factor is increase in number of vessels that have been booked recently for recycling by Indian ship breakers. Ship breaking has observed an increment of about 40% M-o-M in August.
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