India: Steel mills actively secure HMS scrap on falling offers

India’s imported scrap market remained less active with just HMS trade being seen considering drop in offers. However, shredded scrap deals remained limited in absence of firm bids.

“If the cargo is in transit and nearby, buyers are keen to book that material, instead of fresh bookings,” said a scrap trader.

Due to the tremendous volatile market situation and liquidity crunch, a few buyers are not making any deals for imported scrap at lower rates as higher fraud risks are involved, SteelMint learnt.

Meanwhile, currently most preferred scrap source Dubai is closed for one week, on account of Eid holidays. Hence, people would likely change their preference to Yemen, Mauritius, and West African material.

Recent deals and offers

• UK-origin shredded is being offered at $605-610/t CFR levels, moving down significantly by around $40/t w-o-w. Negotiations for shredded were heard at $605/t levels, but the deal remained unconfirmed, said a reliable source.
• Around 5,000 t of Dubai-origin containerised HMS (80:20) was booked at $550/t CFR Nhava Sheva.
• Northern India-based steel maker booked a small quantity of HMS 1 at $565/t CFR Mundra basis, earlier in the week. However, offers increased to $570/t towards the weekend.

Additionally, many container deals were concluded for Yemen and Mauritius-origin material considering the short distance and cost competitiveness.

Domestic market overview

• Domestic scrap prices climb towards weekend: Domestic scrap prices shot up across the country towards the weekend. The key factor attributed to this sharp hike was the rise in semi-finished prices in most regions amidst power outages. Demand for semis picked up, especially in the Punjab market due to tight supply. The near-term price outlook may remain positive, trade sources informed SteelMint.

  SteelMint’s assessment for HMS (80:20) was at INR 44,700/t DAP ($583/t) Mumbai, down INR 300/t ($4/t) w-o-w. Prices in Jalna were assessed at INR 45,200/t DAP ($590/t), down by INR 500/t ($6/t) w-o-w. However, prices witnessed a d-o-d hike of up to INR 700/t ($7/t) today.

  “Considering the domestic market uptrend, buyers must be active in booking imported scrap material, as there is shortage in the domestic market,” said an imported scrap trader.

• Rebar prices rebound on bullish trend: IF-route rebar prices improved in the second half of the week, although prices varied across regions. Prices remained supported on the back of the price hike in sponge iron following an uptrend in coal prices amidst shortage, which ultimately boosted semi-finished and finished steel pices. The near-term outlook remains unclear as prices are fluctuating on a daily basis, trade participants informed SteelMint.
  Domestic IF rebar (Fe 500) prices stand at INR 64,200/t ($838/t), down by INR 1,600/t ($20/t) from INR 65,800/t ($859/t) exw-Mumbai. However, prices witnessed a d-o-d hike of INR 700/t ($7/t) today.
• Sponge offers in Raipur stable: SteelMint’s assessment for sponge P-DRI (FeM 80%) remains stable at INR 36,000/t exw Raipur. With demand boosting towards the week’s closing, selling pressure narrowed down with major sponge producers in Raipur. 

Outlook: Major scrap buyer-Turkey remained quiet in the last couple of weeks. Thus, the market awaits the next round of bookings after the Eid holidays for a clear price direction. However, trade sources hold a mixed opinion on the near term outlook, given the subdued steel sentiments prevailing globally.