India: Imported scrap offers pick up, but trading subdued

Imported scrap offers to India have picked up again. However, trade activities are yet to see any major improvement. The imported scrap offers remained supported by the strong domestic raw material (iron ore, sponge iron), semis, and finished steel prices. Trade in imported scrap remained slow, while deals in small quantities continued to happen for HMS grade material.

Recent offers

• Shredded offers in containers are heard at around $550-555/t, CFR Nhava Sheva, unchanged w-o-w, but no confirmed deal was heard.
• Offers for Dubai-origin HMS 1 and HMS 1&2 (80:20) are being quoted at $500-505/t and $495-500/t CFR levels respectively. Buyers were not willing to pay these high price levels, also limited offers were heard.
• In a deal heard earlier in the week, South America-origin HMS 1&2 (80:20) were sold at $505/t CFR Chennai levels.
• West Africa-origin HMS offers were heard at $480-490/t CFR India levels.

Market highlights 

• Active buying of containerised scrap cargoes from Bangladesh: Discrepancies between bids and offers pushed suppliers to focus on Bangladesh sales. UK HMS 1&2 (80:20) is mainly going to Bangladesh because of high demand. “We are currently not trading in India and Pakistan because as the Dubai market is short of material, the local offering is not able to compete”, said a trade source.
• Domestic scrap prices in India inch up: The regional market is back on track in terms of higher bids from recently concluded OMC auction which pushed up sponge iron and semi-finished prices in most markets. Key HMS (80:20) prices rose by INR 100/t to INR 38,000/t ($510/t) DAP Mumbai following the rise in raw material prices and healthy transactions in semi-finished steel. Prices in Jalna were assessed at INR 39,000/t DAP ($523/t), up by INR 500/t w-o-w.
• Sponge iron prices recover: Prices of sponge iron remain strong on active demand and the market expects that offers would not drop as raw material prices are keeping firm, SteelMint notes. Pellet-based DRI (P-DRI, FeM 80%) prices rose by INR 1,050/t w-o-w to INR 34,700/t ($465/t), exw Raipur.
• Rebar prices rise across market, trade subdued: As billet prices suddenly increased, improvement in buying inquiries were observed along with trade in rebar, especially in the western region. In some markets in the central and southern regions, the gauge parity was increased by INR 500/t to improve the conversion spread which led to weak sentiments that held back bulk buying. Domestic IF-route rebar prices stand at INR 56,500/t ($757/t) exw-Mumbai, marginally up by INR 100/t w-o-w.