Ferrous scrap prices in Indian domestic market continued to remain strong amid high cost of imported scrap and lower capacity utilization by standalone re-rollers.
The trade sources in major scrap consuming regions, west & southern regions mentioned that, scrap availability is measured up in the domestic market as there is no major bulk bookings reported in the specific regions, also the rolling mills are not fully operational, thus scrap generation has been negatively affected; resulting supply crunch for furnaces.
As per SteelMint’s assessment, the current prices of HMS (80:20) scrap is hovering at INR 21,500-22,000/MT in Jalna & Mumbai – Western region & INR 20,000-20,300/MT in Chennai, southern India.
However, if we consider imported scrap of Middle East origin (Dubai) evaluating with current offers of around USD 280-285/MT CNF India, for HMS (80:20) then landed cost in west & south India based mills would be around INR 22,500-23,000/MT (USD 312-319).
Hence amid costlier imported scrap, the domestic scrap suppliers have kept their offers strong.
Further participants believe that, there is room for further hike in Indian domestic scrap prices due to tight availability along with strengthening global offers and limited bulk bookings. Also, tight supplies globally have given additional support to scrap prices globally.
While, evolving depreciation in domestic currency would be a major factor for consideration while calculating landed cost of imports. Indian Rupee has depreciated to 72 against USD which was trading at 71 a month back shared by trade sources.
Scrap imports to India fell by around 26.5% M-o-M in Sep’19. As per custom data maintained by SteelMint, India imported around 3,60,755 MT ferrous scrap in Sep’19 as against 4,90,000 MT in Aug’19.
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