Indian ferrous Scrap market witnesses a downfall in prices by upto INR 1,500/MT W-o-W owing to frequent power cut in major trading regions and slowdown in finished steel demand.
Scrap prices across the country have seen a sharp decline on the back of lower demand in finished steel market. Prices in Mandi Gobindgarh (considered as a benchmark for steel industry) plunged by INR 1,500/MT W-o-W. However, prices in other parts of the country have declined by INR 200-1,100/MT.
At this juncture, there are about 250 Induction Furnaces in Mandi Gobindgarh and Ludhiana combined;, out of which, close to 170 furnaces are operating with 40% efficiency, while the rest 80 have closed down. Power cost in Punjab is very expensive compared to other states in India. These events together, are affecting production of semis, resulting in the low Scrap consumption, stated an official from AIIFA (All India Induction Furnace Association).
Mandi Gobindgarh Price Trend of 3 months
SteelMint, while speaking to market participants has found that, prices in Bhiwadi (Rajasthan) have came down by INR 800/MT in two days, whereas, prices in Ludhiana came down by INR 1,100/MT in a week’s time.
Recently, announced Union budget didn’t bring much cheers for the ferrous Scrap industry, which was expecting a duty cut on imported Scrap. However, reduction in import duty on ships used for dismantling from 5% to 2.5% has been a positive for the ship breaking industry in Alang (Gujarat), thereby boosting the production of domestic Scrap.
|
Place |
Grade |
Price |
W-o-W |
M-o-M |
|
Mandi Gobindgarh |
HMS (80:20) |
25,000 |
-1500 |
-300 |
|
Durgapur |
HMS (80:20) |
26,200 |
-300 |
+450 |
|
Mumbai |
HMS (80:20) |
25,000 |
-500 |
-200 |
|
Chennai |
HMS (80:20) |
24,850 |
0 |
-350 |
Imported Scrap Scenario
Offers for imported Scrap (HMS 1&2) of Dubai origin is heard to be at around USD 380/MT (CFR Mumbai) but no deals have been concluded at this levels. While, a recent consignment of 400 MT HMS 1&2 of African origin has settled at USD 385-390/MT CFR Kandla. .
In FY 14, the country imported 4.6 MnT of Scrap from Middle East, Europe, US & Africa. Scrap imports during the period fell heavily when compared with the total imports of 7.5 MnT during the previous year (FY13).
According to experts of the industry, as long as problems on Iron ore mining are not sorted out, the country will have to depend on Scrap imports.
Leave a Reply