Shredded Scrap Offers to India Fall Further

Containerized shredded scrap offers to India fall upto USD 10/MT W-o-W on increased supply and currency fluctuation.

Shredded scrap offers to Indian market correct further by USD 5-10/MT W-o-W. Current offers for shredded ISRI 211 grade are assessed at USD 235-240/MT CFR India from Europe and US. Although, buyers are hesitant owing to fluctuating currency and falling steel prices in domestic market. Buying interest is observed largely in the range of USD 230-235/MT CFR India levels.

Indian buyers are more inclined towards shredded scrap due to lower offers and also importing HMS requires more documentation,after new inspection norms were introduced by Indian government on 1 July’15.

Current offers for HMS 1&2 are assessed in the range of USD 220-225/MT CIF India from Middle East, whereas South African offers for 25 tonnes container load are at around USD 225-230/MT CIF India.

Currency War

After China devalued its currency, other currencies have had significant impact in last one month

1. Chinese Yuan: fell by 2.5%
2. Indian Rupee: fell by 5%
3. South African Rand: fell by 10%
4. Brazilian Real: fell by 11%

While Euro fell by around 3-3.5% in past 15 days.

Turkey Prefers Chinese Billet

Market participants report that Turkish steel millers are preferring Chinese billets over imported scrap due to cost factor. Offers for Chinese billets have been heard around USD 295/MT, CIF Turkey, whereas scrap (HMS 1&2) prices are at USD 225/MT, CIF Turkey.

It may be noted that Turkey is the largest importer of scrap in the world, with an annual import of 18-19 MnT.

Participants mention that lower offers from China will reduce demand for scrap in sea borne market, which may result in increase in supply and fall in prices.

Trade Wise:

1. HMS (25 tonnes loading) offers from South Africa at USD 225-230/MT, CIF India
2. HMS 1&2 offers from US/Europe at USD 220-225/MT, CIF India
3. HMS 1&2 offers from West Africa at USD 210/MT, CIF India
4. HMS 1&2 offers from Australia at USD 220/MT, CIF India
5. Turning Boring offers from Brazil at USD 205-208/MT, CIF India
6. Shredded scrap (ISRI 211) offers from Europe/US at USD 235-240/MT, CIF India
7. HMS offers at Turkey fell to USD 215-220/MT, CFR  Iskenderun