It looks like ‘good days’ are still too far for Indian Scrap traders. Falling steel prices and weakening Indian rupee have made trades difficult in recent times.
Prices, which were hovering in the range of about USD 385-390/MT a month back, are expected to fall to USD 350/MT in coming days.
Scrap imports to India have increased in last few months owing to fall in Sponge iron production after the Supreme Court’s order of suspending some of the major mines in Odisha.
Speaking to Scrap importers, SteelMint assessed that demand is very poor in Indian market that buyers are unwilling to take positions. Along with this, exporters are looking at markets like Bangladesh, Vietnam and Malaysia.
Some exporters mentioned that they have quite a huge quantity in transit and Indian buyers are not willing to pay at current levels of USD 365/MT.
Offers have heard to come down to USD 360/MT for HMS 1&2 and about USD 390/MT for Shredded Scrap on CFR Mumbai basis. Indian importers are worried that prices may even fall to USD 350/MT levels if market continues to be in this way.
Indian Billet prices corrected by upto INR 2,000/MT M-o-M and domestic Scrap prices by INR 2,500/MT.
“There is such a bearish sentiment that buyers are asking cargoes at a discounted price of USD 10-15/MT from current levels of USD 365/MT,” said a Scrap importer based in Chennai.
Another importer highlighted that depreciation of Indian currency by over 2-3% in last few days has added more concerns for imported Scrap market in India.
Stable Sponge Iron Prices – Only Hope for Scrap Importers
Despite falling Steel & Billet prices in Indian market, Sponge iron prices remain at same level owing to short supply of Iron ore (due to mining restrictions in Odisha). Market participants believed that this consistency in Sponge iron prices may provide some support to Scrap prices.
Scrap contributes 15% of India’s total crude steel production. Whereas, Sponge contributes 25%. Since May’14, we have seen a significant rise in Scrap imports, just after the Supreme Court’s suspension order on mining operations in Odisha.
[su_note note_color=”#dbdbd8″ text_color=”#0b0a0a”]1. Indian currency depreciated to INR 68 levels against USD
2. Offers in international market falls sharply; Europe offers decline from USD 380/MT to USD 360-365/MT for India in a month’s time
3. The Supreme Court has passed judgement on Odisha mining ban[/su_note]
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