Despite of weak demand in the domestic steel market,
ferrous scrap prices are unlikely to correct in the near term due to the following reasons:
* Depreciating Rupee against dollar: Indian Rupee has touched the level of 47.84 against a dollar on Thursday, which is 7 month low. This has made
imported scrap prices costlier by Rs 1000-1200/MT.
* Lower production of Sponge Iron: Scarcity of
raw material like Iron ore and sky rocketing prices of coal has forced sponge
manufactures to cut their production levels. Most of the Induction manufactures have
shifted to scrap as a feed stock and this has lead to a rise in demand for scrap.
* Whereas, domestic Scrap prices also moved up in some mandis' like Kandla, Alang and Raipur in the range of Rs 100-200/MT. Buying activities have slightly moved up in these market. However, Scrap prices corrected by Rs 100-200/MT in Durgapur and Jalna due to the following reasons:
– Absence of buying activities due to festivity of Vishwakarma Puja in Durgapur
– Supply of imported Scrap has softened the domestic Scrap prices in Jalna.
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