Secondary steel mills in India are trying to resume their operations again after the approval from the govt authorities in line with the new guidelines in the 3rd phase of lockdown since 3rd May, however most secondary mills in Maharashtra and Gujarat have not yet been able to commence operations, due to the severe shortage of workforce being experienced.
According to industry sources, the govt’s decision to transport workers and labourers via special trains from the western states back to their native states, has resulted in non-availability of enough workforce, which is now the biggest hurdle in restarting the mills in these regions. However, in South region, especially Tamil Nadu, many mills are now gradually operationalizing.
In addition to this, mill owners are still facing difficulty in clearing the cargoes of imported scrap from ports. Although after the 2nd notice from shipping lines, and post easing of restriction in 1st week of May, buyers had begun the process of clearance, however, due to shortage of drivers and labour, the process is going very slowly
“For every ten trucks/trailers, one driver is available currently, making it very difficult for us to collect the material in spite of easing of restrictions” shared an industry participant.
Under these circumstances, buyers are completely absent from the market for imported scrap purchase, and their main focus remains on obtaining their previously booked shipments from the ports and also on starting the operations as soon as possible by resolving labour issues.
The previous bookings which got shipped from the load port before 19th March, have arrived to port and are mostly stuck, while bookings which could not be shipped by 19th March, were then either cancelled by the buyers or put on hold in maximum cases. And since then, there have been negligible deals concluded, as steelmakers remained unsure by when they will be able to resume.
Assessment for Shredded 211 scrap to India from Europe and North America stands at USD 250-255/MT CFR Nhava Sheva, down by USD 15-20/MT over one week, with the only few prevailing offers in the market being reported in this range. Few offers forUAE origin premium HMS 1 (no ci gi) were witnessed at just USD 240/MT CFR, due to no strong buying interest.
“If mills are able to resume in coming days, then keeping in mind the current inventory levels of steelmakers, we estimate that by end of May or beginning of June, decent bookings of imported scrap to India can be expected” shared a source from a prominent trading house.
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