India: Has Imported Scrap Prices bottomed out?

Imported Scrap prices hit 15 months low. Currently, it is being offered at USD 335-340/MT CFR India. Falling Billet prices in Chennai and Mandi Gobindgarh is likely to keep buying interest low.

Imported Scrap is being offered at USD 335-340/MT, which is considered to be at the lowest level since July, 2013. Offers from Europe, Middle East and South Africa are currently at USD 340/MT level for HMS 1&2. However, buyers are interested at USD 330-335/MT.

While speaking to few mills in Ludhiana, SteelMint learned that mills are currently not holding surplus inventory owing to high volatility in prices. Steel mills are currently in wait & watch mode as they anticipate further fall of USD 5-10/MT in Scrap prices in upcoming days. Although, offers from Europe and Middle East are trading at par with each other, mills prefer to import from Middle East owing to lower transit period.

An induction furnace owner based in Gujarat confirmed that he bought Shredded Scrap from Europe at around USD 355/MT, HMS 1&2 from West Africa at USD 335-340/MT and Shredded from Brazil at USD 335/MT CIF Gujarat port.

A European exporter is heard to be offering HMS 1&2 cargos at USD 340/MT CIF Nhava Sheva, but buyers prefer to wait & watch.

“There are limited sellers at this price, most of the suppliers are offering HMS 1&2 at USD 340/MT, but will not be surprised if prices fall down to USD 335/MT CIF Nhava Sheva,” said an indentor based in Mumbai.

Falling Semi Finish Prices                                                                         

A steep correction in domestic Billet prices in Chennai and Mandi Gobindgarh is considered as a major pullback for Scrap consumers. Billet prices have corrected by INR 500/MT & INR 900/MT in Chennai and Mandi Gobindgarh respectively in a day. Market participants expected an improvement in demand post Diwali. However, correction in Billet prices has led to speculation for falling demand of Scrap.

Few Scrap importers, who frequently deal in European & US material believe that Scrap bookings during mid-November may improve since market in Europe & US will remain shut in December on account of winter vacations. Loading activities are expected to remain muted during this period and buyers, who are seeking European Scrap, have to confirm their bookings by end of November.

At this juncture, speculations are high whether Scrap prices have really bottomed out or will fall further.

* CFR Iskenderun

[su_note note_color=”#dededc” text_color=”#0b0a0a”]Where is the scrap price heading? What is the future of Scrap recycling in India? To know more be a part of Indian Ferrous Scrap & Mill Scale Trade Meet on 21 & 22 Nov, 2014 in Chennai.[/su_note]

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