India: Imported Scrap offers at Chennai remain Untouched

Imported Scrap offers in India’s one of the largest Scrap importing ports, Chennai remain unchanged at USD 375-380/MT CFR.

Steel market at Chennai continued to be depressed with imported offers stable at around USD 375-380/MT CFR. Declining Billet prices are not supporting increased imported offers to breathe in Indian market. The price difference between imported Scrap and Billet are reducing gradually, which is making it difficult for smelters to run the mills.

Billet prices in past 4 months have declined by around 7% in Chennai. Whereas, imported Scrap offers have corrected only by upto 4.5%; narrowing conversion cost. This has left with a crisis in mills; smelters are not even able to cover their variable cost.

Perhaps, many mills prefer to shutdown their furnaces instead of running in loss. Currently, eight induction furnaces are closed in the regions nearby Chennai. Mills having both, furnaces as well as rolling mills have only managed to work in the stressful situation.

Billet: Basic prices
Scrap: CFR Chennai

“Recently, fresh stock of Scrap is unloaded at Chennai port, but smelters are running short of cash for its procurement,” – said a finished manufacturer based in Chennai.

Other market participants at Chennai believe that smelters would only prefer imported Scrap if the domestic Scrap prices, which have risen by INR 500/MT in past few days, will further increase by INR 500/MT. Currently, domestic offers are viable for the mills and its supply is sufficient to cater the demand. They further added, it would not be wise to prefer imported Scrap over domestic, until the price parity is achieved.

European Turning Scrap of premium quality is offered at USD 350-355/MT CFR Chennai, but deals are been heard to be settled in the range of USD 342-345/MT CFR.

Similarly, Shredded Scrap is offered at around USD 395-400/MT CFR and deals are been sealed at around USD 390/MT CFR Chennai.