India’s imported scrap market remained mostly quiet for yet another week. Imported scrap offers to India stayed steady after witnessing a hike of $15/tonne (t) earlier in the week.
On the other hand, the finished steel market remained sluggish due to heavy rains, slower construction, and infrastructure activities. Higher raw material costs and falling finished steel prices squeezed the margins of Indian secondary players.
In addition, the depreciating Indian rupee (INR) against the dollar ($) and slower deliveries are other concerns for scrap importers. The INR slumped to 74 versus $, compared to 72.5 levels seen in early –Jun’21. Longer delivery time for imported scrap is another concern. Availability of shredded was heard to be tight for Aug’21 delivery for container shipments, adding to the worries of Indian buyers.
“Lower conversion spread due to dull finished market may force induction mills to cut their production and hence they will lower scrap consumption,” said a market insider.
- SteelMint’s assessment for UK/Europe-origin containerised shredded scrap stands at $540/t CFR Nhava Sheva, higher by $15/t w-o-w.
- Fresh offers for the UAE-origin HMS 1 are now at $495-500/t CFR levels and HMS 1&2 (80:20) at $490/t CFR.
Furthermore, “Few deals of PNS were heard at around $525/t CFR Chennai, but the Indian market is not picking up, because there is still uncertainty in scrap prices and also rupee (INR) depreciation is weighing on imports. So, people will not buy till the currency stabilises”, said a Chennai-based scrap trader.
Many of the market players opted to go for domestic scrap, as its prices came down slightly on account of correction in sponge iron and semi-finished steel prices.
Domestic scrap prices show mixed trend: Melting scrap prices plunged by up to INR 2,600/t in the scrap markets in north India on 18 Jun’21 on muted demand for finished steel and sharp downward correction in semi-finished steel prices. Also, sponge iron prices dropped, tracking the fall in billet prices. SteelMint’s assessment for HMS in western India is at INR 34,500/t DAP Mumbai, down by INR 100/t w-o-w, and the same is at INR 34,000/t DAP for Jalna, down by INR 300/t w-o-w.
SteelMint’s benchmark sponge P-DRI (FeM 80%) prices dropped further by INR 100/t to INR 30,600/t, exwRaipur, on 17 Jun’21. Prices fell due to dull demand as well as a drop in billet prices by INR 250/t d-o-d.
Rebar prices down on weak demand: Weak demand weighed on the induction furnace (IF) route rebar market. Prices further declined sharply by around INR 2,000-2500/t w-o-w in all the major markets due to limited sales in finished steel and subdued market sentiments. According to SteelMint’s assessment, induction furnace (IF) grade rebar prices in Mumbai stand at INR 46,800/t exw, falling by INR 700/t w-o-w.
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