International scrap market seen a correction; post continuous price rally from Sep’16 onwards.
Turkey the largest importer of ferrous scrap has corrected its prices to USD 275/MT CFR US origin and USD 265/MT Europe origin.
India the second largest ferrous scrap market is also witnessing low demand due to poor domestic steel price sentiments post demonetization.
Containerized Imported scarp offers to India, shredded are at USD 275/MTCIF from UK, Europe, or USA origin. HMS 80:20 offers are at USD 240/MT CIF. Similarly offer from Middle East – Dubai 25MT loading vessel are offered at USD 240-245/MT CIF Nhava Sheva, India.
It should be noted two bulk scrap vessels arrived at Indian port out of 11 scrap vessels. These were booked in September and October’16 by Indian importers and the remaining vessels are expected to arrive before 15th Dec’16. This will lead to increase scarp availability in local market.
As per sources local ready stock material HMS 80:20 (1&2) are offered at USD 220-230/MT due to limited buyer availability.
Impact of Demonetization on Scrap:
India approximately generates 12 – 14 MnT of scarp yearly; these scrap trade is generally on cash basis. Thus scarp trade will be deeply affected by demonetization. Slowly this trade is expected to shift to imported scarp market.
SteelMint learned while talking to market participant lot of scarp based furnaces has cut down production significantly post demonetization like Jalna in MH, Muzzafarnagar in UP, Gobindgarh in Punjab and so on. It is also been reported standalone furnace operator halted production due to high inventory and low sales.
Comments:
“India buyers are expected to resume scrap buying post 3rd week of Jan’17 due to bulk vessel delivery till Dec’16 and ease in banking transaction post Jan’17 onwards.” said a Mumbai based indenter.
Another indenter stated, “Buyer are awaiting for further correction in price as Iron ore and coking coal indicated price correction”.
Wada based furnace Manufacturer stated, “Plants are running at 30-40% capacity, demand of finish steel is also low, our scrap buying will resume post mid Jan’17”.
Global imported ferrous scrap offers in week 48:
| Particular | Size | Prices | 1W | 1M |
| CNF India | HMS(80:20), Europe | 245 | 260 | 228 |
| HMS-1, Middle East | 250 | 258 | 230 | |
| HMS-1&2, S.Africa | 240 | 253 | 225 | |
| Shredded, Europe | 275 | 278 | 241 | |
| Shredded, US | 275 | 278 | 241 | |
| CNF Taiwan | HMS(80:20), US | 245 | 250 | 205 |
| CNF Turkey | HMS(80:20), US | 273 | 275 | 235 |
| CNF Bangladesh | Shredded, Australia/Europe | 290 | 290 | 247 |
| HMS 80:20, Australia/Europe | 270 | 270 | 235 | |
| CNF Pakistan | Shredded, US/Europe | 275 | 270 | 243 |
Source: SteelMint Research
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