India: Imported Scrap Offers rise; falling Iron Ore Prices worry Importers

Imported Scrap offers flowing down to India from Middle East have spiked nearly by USD 10/MT in a weeks’ time.

Indian currency is currently favoring imports. It has retraced back to levels of 59.87 inviting Indian traders to import more & more of Scrap. Appreciation of INR has made Scrap imports viable to the country importers.

The beginning of new financial year has seen improved optimism from Scrap traders. As per few market participants, there is decent volume of money flowing into the market which has lead to an uptick in demand for  Scrap.

Equally, increase in construction activities has resulted into improved demand for Re-bars, making room for Scrap consumption. Currently, imported offers from Middle East have seen considerable rise on the back of improved demand in domestic market. 

[su_quote cite=”A trader based in Dubai“]We have recently closed a deal 500 MT of HMS 1&2 at USD 385/MT CFR Nhava Sheva. We expect prices to hold at these levels due to strong buying sentiments.[/su_quote]

However, some traders hold a divergent view, believing that the steep cut in domestic prices of Iron ore and Pig iron by INR 500/MT (USD 8/MT) in the month of April will build pressure on Scrap prices. Speaking to various importers SteelMint assessed that with falling Iron ore prices, Sponge & Pig iron prices are bound to beleaguer. This is worrying Scrap importer and traders.

Indian Steel industry is a Sponge iron driven industry and out of total crude steel produced through IAF & EAF route, only 30% is produced using Scrap and remaining 70% is produced through Sponge & Pig iron.

On the other side, in International market, offers to Turkey raised by USD 10/MT in a week’s time reaching to USD 384/MT from USD 374/MT CFR Turkey. Global market is expected to maintain its positive trend for April owing to imbalance in demand & supply. Europe is facing shortfall in supply of Scrap, while US is hesitating to offer Scrap in global market as the domestic market of the country is at boom and selling in global market won’t give them better realization. Turkey Mills which are in need of Scrap to produce steel are therefore accepting the offers even at higher levels.

Current Import Scrap Offers to India 

USD 1= INR 59.87