Imported scrap offers to India continued to move up this week as well, as the global market strengthened since last week closing, while Indian buyers were less interested in costlier grades like Shredded and more inquiries for HMS and lower grades were observed, with some bookings getting concluded in South and West regions. Higher preference for local scrap and DRI alternatives from buyers continued.
SteelMint’s assessment for containerized Shredded 211 from Europe and North America now stands at $290/t CFR Nhava Sheva, further up by $5/t in comparison to last week closing and rising by $12-13/t since June’20 closing.
Last bookings for Shredded scrap were concluded from USA and UK origin were concluded at $285/t CFR, near enc of last and opening of this week, while most new offers for Shredded now stand at $290/t CFR and higher levels, from these origins. However, Brazil origin Shredded scrap offers were recorded at cheaper levels of around $275-280/t CFR.
HMS 1&2 offers also witnessed an uptrend and stand range bound as per origins and grades.
- HMS 1&2 (80:20) offers from UK were reported at $255-260/t CFR Nhava Sheva, with few bookings reported earlier at around $255/t and some inquiries from Mundra region buyers as well as Punjab based mills reported.
- HMS 1&2 (80:20) from West Africa was sold to Goa based mills at $247-248/t CFR Goa for 21t loading and offers for the same with 23t loading stood at $250/t CFR. West African HMS (80:20) offers to Nhava Sheva stood around $243-245/t and at $255/t CFR to Chennai
- Brazil origin HMS (1&2) was sold to Chennai region mills in the range of $261-265/t CFR Chennai this week, with around 3,000 t material booked since Monday.
- In spite of the ongoing export ban, HMS 1&2 (ci gi 8%) offers from UAE were heard at around $270/t CFR Nhava Sheva, and premium HMS 1 at $280/t CFR, but major parties stayed away from UAE scrap.
- Few other grades in the market included cast iron scrap being sold at $267-268/t CFR to West regions, while Turning scrap was offered at around $245/t CFR Nhava Sheva.
West Indian steelmakers still operating at a higher DRI share in their furnaces –
Since the last one to one and a half months, many mills in Maharashtra region, which normally use around 20% DRI in their induction furnaces, have been operating at around 50% DRI, as a temporary makeshift arrangement, at a time when DRI prices are considerably cheaper and there is also a shortage of scrap stock with the mills in the region. Post lock, since June, imported scrap bookings have been very slow, in most regions except South India.
As per few steelmakers, although more C-DRI usage increases energy consumption, but since the production levels currently are less than normal levels, and the price gap between DRI and scrap is high, the said arrangement is temporarily working, however as the production levels increase in coming months, and there is rise in Iron ore prices, driving DRI prices also up, then this would not be viable. On the other hand, cheaper ship yard scrap at Alang, (due to sharply reduced prices of scrapped vessels booked for ship-breaking,) are being preferred in Gujarat and nearby mills.
The below graph shows the widening price spread between scrap and DRI prices to Maharashtra region, in comparison to a narrow price spread in Q1 ’20.
Pakistani mills continues active bookings at increasing prices – Around 6,000t of Shredded 211 scrap was booked in last 2-3 days between $289-292/t CFR Qasim from UK/Europe, with the latest bookings today being reported at $292/t CFR level. Fresh offers for Shredded reported at $293-294/t CFR from UK and $290/t CFR from Europe. After active bookings till today, some resistance from buyers was observed today, against further rise in offers given slow finished steel sentiments.
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