India: Rising Billet Prices support Imported Scrap Market

Rising domestic prices and high international offers are supporting imported Scrap offers to India. Scrap from Middle East is offered at around USD 370/MT CFR Nhava Sheva.

Imported Scrap offers in Indian market seem to have found some support on the background of rising Billet & Scrap prices in the domestic market.

International market seems bullish in past few days with strong buying coming out from Turkey with the end of festival season. European nations being major source of Scrap are actively exporting the material to Turkey in order to fulfill its increased appetite. Owing to sudden improvement in demand, prices in Turkey have increased by USD 15-18/MT (M-o-M). Current inflated offers are in the range of around USD 387-388/MT CFR Turkey.

Similarly, offers flowing to India have also witnessed the influence of increased international Scrap prices, which are further supported by improved domestic demand.

Domestic Billet prices, which have recovered by upto INR 1,500/MT in a week’s time, have brought some buying interest for imported Scrap in India. However, few market participants believe that though Billet demand has moved up, the finished steel demand is still not so encouraging. This has left market direction less and led most of furnaces to wait & watch till market gets some direction.

Rising Billet prices vs. Imported Scrap 

Current offers flowing from Middle East are at around USD 370/MT for HMS 1&2. Induction furnaces based in Mumbai claimed that they have offers from Baharain at USD 365/MT CFR Nhava Sheva.

European exporters are holding their offers for Shredded Scrap at around USD 395-400/MT and USD 370-375/MT for HMS 1&2 CFR Nhava Sheva (delivery in the month of September).

Apart from above offers, few trades of around 250 MT HMS 1&2  were heard to be settled at USD 370/MT CFR Nhava Sheva from South Africa.

On the other hand in Chennai, there is no buying heard in these improved offers, as the port stock is currently enough to fulfill their requirement. In fact, though the offers here are floating at the levels of USD 370-375/MT for South African HMS 1&2, the trades are heard to be settling at around USD 365-367/MT CFR Chennai.

Few market participants at Chennai shared observing continuous depletion in stock at Chennai port, it is expected that importers may very soon start accepting the higher offers once the inventory at ports come to an end.

Indian Domestic Scrap Prices also move up by INR 1,000/MT W-o-W

Scrap prices in Alang, India’s largest ship breaking region, have moved up by upto INR 1,500/MT (USD 25/MT) in last 1-week owing to rising Billet prices. Scrap traders based in Alang mentioned that prices are rising because of low inventory level of Sponge iron & Scrap at induction furnaces across India.