Indian buyers hesitate buying imported Scrap over falling Indian Rupee and cheaper Sponge iron in domestic market.
Imported Scrap offers remain high from US and Europe, however some downtrend is noticed from Middle East. Amid these high offers Indian buyers remain hesitant in making fresh purchases owing to falling steel prices and depreciating Indian Rupee.
Current offers for HMS 1&2 from Middle East are assessed at USD 275-280/MT (down by USD 2-3/MT W-o-W) and from Europe at USD 280-285/MT on CIF India basis.
HMS-1 (25 tonnes loading) offers from Middle East are assessed at USD 290/MT and South Africa at USD 280-285/MT, CIF India.
Whereas, Shredded scrap offers from US are in the range of USD 302-303/MT and 305-307/MT from Europe on CIF India basis. However, buying interest is at USD 298-300/MT, CIF levels.
Europe Scrap Offers Rise
Scrap offers in Europe rise owing to improved local demand and strong Euro. Prices have moved up by USD 8-10/MT in May’15. Average offers for HMS 80:20 are at USD 250/MT FoB Rotterdam, which was around USD 240/MT in the beginning of May’15.
Exporters highlighted that Scrap offers from Europe may not come down in coming weeks, looking at strong buying from Turkey (at USD 280-285/MT, CFR basis). Also, improving Iron ore prices in China (considered as a global benchmark) will further provide support to global steel prices. Currently, Fe 63.5% Fines is traded at USD 64/MT (up by USD 4/MT W-o-W), CFR China port
Indian Rupee dips to a 20-month low
INR which is currently trading at INR 64.3 against USD, dropped to a 20-month low, making imports expensive by 1.5 % W-o-W. Hence, importers hesitate to take any buying position.
Indian manufacturers prefer Sponge & Pig iron over Scrap
Looking at sharp price fall in Sponge & Pig iron recently, Indian steelmakers are preferring Sponge & Pig iron over imported scrap. Sponge iron price which had corrected by upto INR 500-700/MT during last week of Apr’15 attracted manufacturers, along with noticeable price fall in Pig iron (upto INR 1,000MT M-o-M).
On the other hand, Steelmakers are hopeful that opening up of mines in India will ease raw material situation. But this may put further pressure on Sponge and Pig iron prices.
Price as on 12 May’15
| Global Scrap Offers in USD/MT | |||||
| Particular/Delivery | Size/Grade | Prices | W-o-W Change | 2 weeks ago | 1 month ago |
| CNF Mumbai, India | HMS(80:20), Europe | 280-285 | + 2 | 275-285 | 275-280 |
| HMS-1&2, Middle East | 275-280 | -5 | 285 | 290-295 | |
| HMS-1, Middle East | 290 | – 2 | 293-295 | 300 |
|
| HMS-1, S.Africa | 280-285 | 0 | 280-285 | 280-285 | |
| Shredded, Europe | 305-307 | 0 | 300-302 | 298 | |
| Shredded, US | 302-303 | 0 | 298-300 | 296 | |
| CNF Turkey | HMS(80:20), US | 280-285 | + 5 | 272-278 | 258-264 |
| FOB Rotterdam, Europe | HMS(80:20),Europe | 245-255 | + 5-7 | 238-242 | 230 |
| CNF Taiwan | HMS(80:20),US | 225-227 | – 5 | 230 | 236 |
| Sponge Iron (DRI) Prices in INR/MT | |||||
| Ex-Durgapur | 78 FeM | 18,200 | + 800 | 17,300 | 18,200 |
| Ex-Raipur | 80 +/-1 FeM | 17,400 | + 400 | 17,100 | 17,450 |
| MS Billet Prices in INR/MT | |||||
| Ex-Mandi Gobindgarh | 125×125 mm | 29,900 | + 300 | 30,000 | 30,850 |
| Ex-Mumbai | 125×125 mm | 27,700 | – 300 | 28,500 | 28,600 |
| Ex-Chennai | 125×125 mm | 27,200 | – 600 | 28,000 | 28,100 |
Source: SteelMint research
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