Scrap Exporters hopeful on appreciating Indian Rupee

Ferrous Scrap exporters seems to be optimistic about buying on account of appreciation in Indian currency.

Scrap exporters believe that buying from Indian steel mills may improve on the backdrop of recovering Indian Rupee against USD. Indian currency has appreciated by around 3% in last few trading sessions (currently at 62.16/USD; lowest recorded at 63.96/USD in the month of Dec’14).

Scrap Exporters prefer to hold Offers

[su_pullquote align=”right”][su_note note_color=”#c2d6e9″ text_color=”#0b0a0a”]Outlook
Indian Rupee is likely to trade at the same level as slump in oil prices continue to weigh on market sentiments.[/su_note][/su_pullquote]

Witnessing the appreciation in buyers’ currency, Scrap exporters prefer to hold offers at the same level, who were earlier in thought of building price cushion after depreciation in Euro. Last offers were assessed at USD 314-315/MT for HMS 1&2 and USD 330-335/MT for Shredded scrap, CIF India.

A Scrap exporter based in Middle East said, “We are hopeful that buying will improve from Indian buyers looking at appreciating currency. If Indian Rupee continues to appreciate further, we may think to raise our offers. We sold our last cargo of HMS1&2 at USD 314/MT, LMS bundles at around USD 285/MT and Blue Steel at around USD 338/MT, CIF Mumbai, India.”  

On a similar lines, another exporter based in Europe shared the same views on Rupee that currency will play an important role in trade. He also mentioned that current offers are not less than USD 337/MT, CIF India for Shredded, despite weak buying.

Falling Sponge Iron Prices may resist Scrap Buying at Higher Levels

Indian steel mills are quite selective at the moment. Price pressure in the domestic market has resulted in cheaper Pig iron & Sponge iron offers, which in turn has left the furnaces with easy choice over Scrap. Most of the participants even believe that falling domestic prices will offset currency factor.

They also feel that depreciating Euro against USD may not stimulate price rally in coming days.

At the moment, Scrap prices are stuck between international currency adjustments and domestic price war. Offers may remain at the same level of around USD 315/MT, CFR before it gets any further clarity from the market.

Source: SteelMint Research