Indian Rupee falls to 2 years low on depreciating Chinese Yuan; may result in resistance to purchase imported scrap.
Imported scrap to India witnessed some improvement in offers on the back of favorable domestic and global sentiments. Stability in domestic steel prices along with slight uptick in global prices in countries like China, Turkey has largely supported scrap offers. Importers reported to have inquiries increasing from steel mills.
However, Indian importers are still hesitant in making fresh bookings owing to falling Indian currency, which is a result of depreciating Chinese currency Yuan.
One of the importer shared, “We are hopeful about increase in buying interest, knowing the fact that manufacturers are currently running short and have limited stock in pipeline.”
The European offers for HMS 80:20 are heard at USD 225-230/MT and shredded at USD 250/MT, CFR Nhava Sheva India. Offers from Middle East also rose up by around USD 5/MT at USD 220/MT for HMS 1&2 (23 tonnes loading) and USD 235/MT for HMS 1 (25 tonnes loading).
Few suppliers at west coast seem perked up after receiving bids at around USD 246-247/MT for shredded, which are just USD 3-4/MT less than the offered price.
Scrap market at South also looked positive, with improved offers in market. Shredded here at South (of US/UK origin) is offered at USD 250-255/MT, HMS 1&2 at USD 225/MT with 23 tonne loading (Africa other than South Africa, Singapore origin), turnings at USD 215/MT (Brazil, UK, South Africa origin), plates & structural at USD 235-240/MT (Singapore origin), CFR Chennai/ Kochi/ Tuiticorin, India.
A source at Chennai informed, “HMS 1&2 of Australian origin was sold at USD 226/MT CFR Chennai, last Thursday.”
Offers for South African Scrap was not frequently heard in Southern India market. A scrap supplier addressed the issue by sharing, “It is because most of the South African scrap offers for HMS 1 are consumed by west coast scrap buyers (Nhava sheva) at a decent rate of USD 230-235/MT (up by USD 5-10/MT W-o-W); if the material is offered to Chennai, it would certainly be at USD 240/M, which is a way higher than buyers acceptance level.”
Outlook
Though the current demand sentiments seem to support scrap market in the near term, recent fall in Indian currency by 1.5% in two days time (owing a noticeable fall in Chinese currency by 2.7 % since Monday) may result to cautiousness in importer.
Indian ferrous scrap imports likely to be low in August as Indian buyers were concerned over volatile prices in global market during June-July’15. Scrap imports in July were recorded at around 506,400 MT and 481,000 MT in June’15.
India is the third largest importer of scrap after Turkey and Korea.
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