Scrap offers to India have fallen by upto USD 90/MT (30%) in last 6 months.
Global scrap prices have fallen significantly in last few months. Scrap (HMS) offers to India alone has witnessed a sharp fall of USD 60/MT in last 3 months and USD 90/MT in 6 months. Offers for HMS 80:20 Europe-origin, which were around USD 245/MT during Jul’15, have presently slipped to USD 180-185/MT, CFR India.
Similarly, scrap offers in the world’s largest scrap importer, Turkey have also witnessed a sharp fall in last 3-6 months. Cheaper billet offers from China have swiped away the scrap market in Turkey. Offers for HMS, which were around USD 260/MT during Jul’15, have dropped to USD 180/MT, CFR Turkey.
Turkey still prefer Chinese billet
Chinese billet still remains a concern for scrap market. Turkey, which is the largest importer of ferrous scrap, is still preferring billet from China. Scrap demand may continue to remain subdued till Chinese billet will find some strength. Current offers for Chinese billet are assessed at USD 280/MT, CFR Turkey.
In order to compete Chinese offers, Russians have also lowered their offers by USD 5/MT. Current offers for billet are assessed at USD 280/MT, FoB Black Sea, which were USD 285/MT, FoB last week.
However, strengthening Russian currency will lower down export parity for Russian mills and prices may find support.
Prices almost bottomed out – Scrap exporters
Scrap suppliers anticipate that prices have almost bottomed out and there is very little scope of further correction from these levels.
“We feel that prices have bottomed out. Current market prices are so low that it is not able to cover the recycling cost. Hence, quite a few scrap yards have cut down their operations and many are inline to shut their yards also.
Shredded scrap offers are assessed at USD 200/MT, CFR India. However, some ‘distressed’ deals have also been reported at USD 190-195/MT, CFR India”, said a large scrap supplier based in Singapore.
Trade-wise
1.Europe/US Shredded scrap offers are in the range of USD 195-200/MT, CFR India
2.HMS 80:20 from Europe is offered at USD 185/MT, CFR India
3.Middle East suppliers continue to hold their offers at USD 205-210/MT, CFR India
4.South African HMS 1&2 offers are assessed at USD 195-200/MT, CFR India
5.HMS offers to Taiwan are assessed at USD 158/MT, CFR
6.HMS 80:20 from US/Europe to Turkey is offered at USD 180/MT, CFR
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