Shredded Scrap offers from US, which had fallen to the level of USD 400-402/MT CFR India in the beginning of last week, has increased by USD 4-5/MT by end of the week.
US based suppliers have increased their offers for Shredded Scrap owing to a good demand in the domestic market. They are currently offering it in the range of USD 405-407/MT CFR Nhava Sheva (in containers). Many market participants speculate that there is currently very little chance of price correction looking at the present US Scrap demand; they expect prices likely to go up further by USD 2-3/MT.
Weak demand in Indian steel market currently will restrict manufacturers to purchase US Scrap at higher prices. Manufacturers would rather prefer buying HMS/Shredded Scrap from Europe, which is cheaper as compared to US Shredded offers. European offers for HMS 80:20 is at USD 385/MT CFR and Shredded at about USD 400-402/MT CFR Nhava Sheva.
Indian manufacturers are infact expecting Shredded offers in the range of USD 395-400/MT CFR India.
It is surprising to note that offers from Middle East are declining day by day, and have touched USD 380-383/MT, which is even cheaper than European offers.
One of the Scrap consumers based in India quipped, “We are facing some quality issue with Scrap from Middle East countries and this infact is pulling its offers down in the Indian market.”
Offers from Middle East are currently hovering at USD 380-383/MT CFR Nhava Sheva. A fresh deal of HMS 1&2 was settled at USD 383/MT CFR Nhava Sheva.
[su_note note_color=”#e7e7e5″ text_color=”#100f0f”]In domestic market, Sponge iron is likely to dominate Scrap market in upcoming days. As discussed by the panelists, in the ’Indian Pellet & DRI Summit 2014’, an event organized by SteelMint on 27 Jun, 2014 at Kolkata, “Iron ore prices may fall in future as mining operations in Odisha resumes by the end of July.”[/su_note]
Sponge iron prices are trading in the range of INR 20,000-22,500/MT and are expected to remain in the same range for the time being.
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