In a conversation with
Mr. Puneet Gupta, an exporter based in Canada discussed on scope of supply of
scrap from Northern US to India and Turkey.
1. How
has domestic market been in US for last one month?
Puneet: The US domestic market is still not to the mark as expected, but it is
better than the last few months. If you compare
year on year Jan,2013 and Jan, 2012, the HMS-1 current spot price in the
US market is $370 as compared to last year $430 (per gross ton delivered).
The situation in North
America is completely different from India/Asia. The scrap providers do
not actually want to export as they already have big customers (steel mills)
which are ALWAYS short of steel scrap.
Here if they export,
they need some extra incentive on the top of what they are currently getting.
So, if I have to offer something for Nhava Sheva or Mundra it is around
$420 for HMS 1/2 (80:20). (For the customer who placed the order now for
a Feb end of March beginning delivery as it can take anywhere from 40 to 60
days). Till April the trend is upwards, looks like.
2. If
prices have gone up is it because of rising iron ore and steel prices in China
or demand has come from all across the globe?
Puneet: I believe it is an offshoot
of both the increase in iron ore prices and demand.
But it is more of a demand factor.
3. Do you see India as a potential market for
supply of scrap from US and Canada or Turkey is preferred market for suppliers
based in West?
Puneet: It is just a demand and supply factor for scrap. Turkey can
offer the advantage of distance, but as said earlier US/Canada can meet
almost any demand because of its big construction industry. Secondly, it
is also on the short and long term contracts, which are more with
the North American companies. Thirdly, it is also because of many
US companies have their branch offices in India, supplying directly
to the Indian steel mills.
4. What would be your current offers for Indian
buyers and Turkey buyers at the
moment?
Puneet: For Indian buyers we can offer HMS 1/2 80:20 in the
range of $410 to $430 CFR Nhava Sheva which depends on the location of our
scrap yards and loading ports.
The reason why Indian
buyers prefer Dubai over North America is the reduced distance and hence the
freight cost and time which poses lesser risk of price fluctuations.
Shipments from North
America will certainly go through many international ports before reaching
India. This is the reason; Canadian prices are somewhat higher because of the
increased distance and freight to India. Like the prices are also dependent on
the good quality scrap which is both clean and compact (A requirement of
HMS-1).
But North American
suppliers are giant suppliers and can supply any amount anytime, which is why
Indian buyers have to buy from here even if it’s at a higher price.
Leave a Reply