- Transportation disruptions during Pongal tighten scrap supply
- Upcoming long weekend may keep trade subdued in coming days
BigMint’s latest assessment indicated a firm w-o-w uptrend across steel and scrap prices in the Chennai market, despite marginal d-o-d corrections. HMS (80:20) prices rose by INR 900/t w-o-w to INR 30,800/t and edged up by INR 300/t d-o-d. Billet prices increased by INR 1,200/t w-o-w to INR 42,500/t but softened by INR 200/t on a d-o-d basis. Rebar prices posted a strong w-o-w gain of INR 2,300/t to INR 47,000/t, while witnessing a minor d-o-d decline of INR 300/t. The divergence between weekly and daily movements points to cautious buying amid recent price run-ups.
Imported and domestic price trends
Market participants indicated that imported shredded scrap was offered at $350-355/t CFR Chennai, while HMS (80:20) was quoted at $330-335/t. Buyers were bidding $5-10/t lower. Buying interest remained subdued, as the strengthening US dollar continued to raise landed costs, prompting buyers to remain cautious on fresh imported scrap bookings.
HMS (80:20) prices in the domestic market were quoted at INR 30,500-31,000/t for spot deals with immediate payment. Transactions involving extended payment terms were concluded at higher levels of INR 31,000-31,500/t. Market activity remained largely concentrated within the INR 30,500-31,500/t range, with the majority of trades executed at these levels.
Buyer-supplier sentiments
According to sources, the regional steel market has shown a positive shift after the Pongal festival, supported by improved sentiment in other key steel markets. The market remained largely closed during the previous week due to festival holidays and reopened on Monday this week. In the interim, semi-finished and finished steel prices in other regions had already increased by INR 1,000-2,000/t, which provided mills with the confidence to raise their offers in the local market.
A mill owner indicated that although steel prices have increased over the past couple of days, trading activity in finished steel remains sluggish. Looking ahead to the upcoming long weekend due to Republic Day, market participants expect trade activity to remain subdued in the coming days.
A scrap supplier indicated that HMS (80:20) prices are currently hovering in the range of INR 30,500-31,500/t, with variations driven by payment terms and mill-specific volume requirements. Due to transportation disruptions during last week’s Pongal festival, scrap availability tightened, which supported an increase in scrap prices during the current week.
Regional comparison
In the western India-based Jalna market, billet and rebar prices declined by INR 300/t d-o-d to INR 43,300/t and INR 49,500/t, respectively. Meanwhile, HMS (80:20) prices remained stable and were assessed at INR 31,400/t. According to market sources, trading activity in finished steel has slowed over the past couple of days. Scrap supply has also been slightly disrupted due to vehicle checks at regional borders.
Outlook
While HMS (80:20) scrap prices have firmed up on a w-o-w basis, supported by post-Pongal supply tightness and higher prices in semi-finished and finished steel, the pace of trade activity remains moderate. The recent daily corrections in billet and rebar prices indicate buyer resistance at elevated levels, suggesting that mills are prioritising margin protection over aggressive procurement. Overall, price movements across steel and scrap are likely to stay within a narrow band of INR +/- 200-500/t in the coming days.
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