Local ferrous scrap
prices saw a correction of about Rs 500-1000/MT in past 2-3 days. The off-take for
scrap also went down as most of Ingot manufacturers are operating at lower
capacities.
However, according to
Industry experts, this is the best time to purchase scrap due to the following reasons:
Low Cost: Scrap suppliers in the domestic market
have kept their prices low to keep them price competitive against cheaper
imports. Indian importers have booked bulk orders over last couple of weeks in
line with the strengthening of Rupee against Dollar which reduced the landing
cost of imported scrap at ports.
Tight supply of Sponge Iron: Limited availability
of Sponge Iron is also prompting steel makers to prefer Scrap over DRI.
Market participants
expect prices to remain firm in the near term as suppliers are unlikely to
correct their prices further. Moreover, prices of imported cargoes are also expected
to remain firm as Rupee is still fluctuating against Dollar and availability of
scrap in export countries such as US is said to be constrained due to heavy
snowfall.
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