Domestic melting scrap offers are more or less firm in Jul’16 M-o-M; reported minor price change of INR 200-300/MT in the major markets. However during the same period, billet prices plunged down by 6-7% (INR 500-1,200/MT).
Falling scrap imports due to higher offers and short supply of sponge iron were the major factors of stability in Indian scrap prices.
As per a billet manufacturer based in Mumbai, “In order to melt imported scrap, cost of production is INR 1,000/MT higher than to melt domestic scrap. If considered imported HMS 1&2 at a price of USD 210/MT and domestic scrap at INR 16,000/MT (basic) with 80-85% melting ratio”.
Indian scrap imports during Jun’16 were 481,500 MT; fell by 12.3% M-o-M. Whereas in Jul’16, imports recorded at 308,000 MT; down by 36.03% against Jun’16.
Major price volatile is seen in Alang where highest level touched to INR 15,700/MT and lowest at INR 15,000/MT. Monthly average prices are as follows: INR 15,300/MT (-1.70%) ex-Alang, INR 15,700/MT(-2.30%) ex-Mumbai, INR 14,650/MT(-0.67%) ex-Chennai and INR 17,200/MT (-4.40%) ex-Mandi.
Currently, global HMS scrap offers are prevailing in the range of USD 205-215/MT (INR 13,750-14,400/MT) and shredded at USD 223-227/MT (INR 14,950-15,200/MT) on CNF India basis.
Scrap monthly average prices since Jan’16
| Month | Alang | M-o-M | Chennai | M-o-M | Mumbai | M-o-M |
| Jan’16 | 16,150 | -600 | 13,200 | +1,100 | 15,450 | -100 |
| Feb’16 | 15,800 | -350 | 14,050 | +850 | 15,550 | +100 |
| Mar’16 | 16,500 | +700 | 15,650 | +1,600 | 16,150 | +600 |
| Apr’16 | 16,900 | +400 | 16,150 | +500 | 16,600 | +450 |
| May’16 | 16,400 | -500 | 15,450 | -700 | 16,250 | -350 |
| Jun’16 | 15,550 | -850 | 14,550 | -900 | 16,050 | -200 |
| Jul’16 | 15,300 | -250 | 14,650 | +100 | 15,700 | -350 |
Prices in INR/MT
Source: SteelMint Research
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