India: Imported scrap offers rise by $20/t, trades remain subdued

Imported scrap offers in India have rallied this week tracking the hike in Turkey prices. However, trades continued to remain slow on lower finished steel sales, production cuts on oxygen supply constraints and preference for domestic substitutes like scrap and sponge iron.

The spread of Covid-19 in the country has caused oxygen shortage and mills are diverting Oxygen to hospitals, resulting in reduced steel capacity utilization. Also, finished steel sales have remained subdued amid imposed lockdown restrictions.

Recent offers and trades –

• A prominent steel mill has booked 2,000 t of shredded scrap in containers at around $480/t CFR basis earlier this week, sources have shared to SteelMint
• Containerized shredded offers have increased by $20/t and stand at $485-490/t CFR Nhava Sheva basis.
• HMS offers from UK/EU origin HMS 1&2 (80:20) are now cited at $465-470/t CFR Nhava Sheva levels
• UAE origin HMS1 is now offered at $470-475/t CFR Nhava Sheva basis.

Secondary steel mills have cut down production on subdued finished steel sales and labour availability issues. In addition to it, the landed cost of UAE origin HMS (80:20) in containers is reported around INR 36,800-37,000/t in Wada, Mumbai. On the other side, domestic prices of HMS (80:20) stands at INR 35,400-35,800/t DAP Mumbai. Hence mills are preferring domestic substitutes, highlighted a market participant.

Domestic scrap prices rally – Domestic melting scrap prices rose sharply by INR 1,300/t on weekly basis. Few fluctuations were observed in different scrap markets depending on regions. Supply tightness of melting scrap, oxygen supply constraints limited steel production and strengthening semi-finished steel movement led to increase in prices. SteelMint’s assessment for HMS in Western India is at INR 35,600/t DAP Mumbai, sharply up by INR 1300/t and the same is at INR 35,500/t DAP level for Jalna, up by INR 1,100/t w-o-w.

Rebar prices in secondary market rise on dull demand – Trade activities have slowed down due to dull demand and continuously falling billet prices. However, in few markets’ sellers offered trade discounts depending on the buying inquiries.

According to SteelMint’s assessment the induction furnace (IF) grade rebar price in Mumbai stands at INR 50,300/t exw, up by INR 1,300/t w-o-w.