Indian ferrous scrap
market strengthens with rising demand and limited availability of the product. Prices
for local ferrous scrap have been moving since last month and market
participants expect the prices to remain firm in the days to come.
Following are few reasons
that have pushed up the domestic scrap prices in past few weeks:
– Acute shortage of Iron
ore leading to short supply of another key raw material i.e. sponge Iron
– Steel Plants located
outside Ore rich states preferring Scrap over DRI (Sponge Iron)
– Volatility in Forex
market leading to expensive scrap imports
“There is acute shortage
of Sponge iron in the market and steel manufacturers are relying more on the
scrap for steel manufacturing. Ferrous
scrap is likely to remain as an important ingredient for steel manufacturing
until the supply of Iron ore improves. So,
scrap prices in the near term are likely to remain high”, said a scrap trader
based in Jalna.
According
to a broker based in Mumbai, “Demand for both semi finished and finished
products is fairly good than last month. Value of Rupee against Dollar is still
low which might discourage imports of ferrous scrap. So, local scrap suppliers will raise their offer
prices”
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