India : Stainless steel scrap prices correct downwards, finished prices improve

SteelMint estimates that Indian 304 grade stainless steel scrap prices have dropped to INR 128,000/t ($1571/t) ex-Delhi today, down from INR 136,000/t ($1,670/t) on 22 September, 2022. The price of 304 grade HRC ex-Mumbai has risen to around INR 243,000/t ($2,983/t).

Stainless steel scrap prices have fallen as a result of sharp corrections in LME nickel prices.

Market highlights

Scrap price offers from Indian mills in the domestic stainless steel scrap market remained low. The market was mostly quiet, and the major mills reduced their buy prices by more than INR 8,000/t.

Despite volatile LME nickel prices, finished stainless steel prices in India rose due to decreased supply from overseas sources and reduced stock in domestic warehouses. POSCO’s Pohang works were flooded as a result of Typhoon Hinnamnor. As a result, the steelmaker cancelled all orders while the maintenance work is being completed, and it could take up to three months to resume normal operations.

Weak global sentiments, as a result of slowing Chinese demand and tightening monetary policy in major global economies, are likely to have a negative impact on global nonferrous metal demand, weighing on metal prices. LME nickel 3-month prices have fallen more than 10% in the last week, hovering around $22,041/t.

Ferro chrome trend

According to SteelMint’s assessment on 22 September, producers were offering ferro chrome (HC60%) at around INR 94,000-95,000/t exw Jajpur. Indian ferro chrome smelters tried to push up prices to reduce losses amid rising inquiries in the domestic market. High production cost due to hike in chrome ore prices together with the rise in stainless steel prices w-o-w forced producers to raise their offers.

Outlook

Due to the sharp correction in LME nickel prices, stainless steel producers have reduced their purchasing levels. The increase in finished steel prices may encourage scrap inventory restocking in order to fully meet the upcoming demand. Reduced imports of HRC and CRC will also help domestic flats production in the coming months.