In India, inquiries for imported scrap picked up due to the recovery in steel prices in the domestic market. Although there is uncertainty around steel demand persisting due to the resurgence of the COVID-19, ferrous scrap buyers are expected to resume trades to refill inventories.
Primary mills focussed on the production of flat steel to take advantage of the bullish HRC market. Effective April, flat steel prices could increase by Rs2,500-3,000/mt in the domestic market and increase the input costs for auto companies by Rs5,000-7,000. Exporters sold HRC at prices above $800-820/mt cfr Vietnam. Offers for billets rose to $620-625/mt cfr Southeast Asia following a sharp rise in Chinese billet prices.
The Davis Index for containerized shredded inched up by $3.75/mt to $432.5/mt cfr Nhava Sheva from Friday. Mills had to raise their bids as sellers refused to cave in considering the rise in global and domestic scrap markets. Offers for shredded were in the range of $435-445/mt cfr Nhava Sheva.
In Turkey, bulk bookings of rebar were heard at an equivalent of $670/mt cfr Southeast Asia creating room for imported scrap to move up more in the coming days. Prices for HMS 1&2 (80:20) have climbed by more than $6/mt to $427/mt Turkey and could rise above $430-435/mt cfr for the rest of May shipments and boost imported scrap prices in South Asia.
The daily Davis Index for UAE-origin HMS 1&2 (80:20), Tuesday, settled at $400/cfr Nhava Sheva, up by $5/mt from Friday. A limited volume of Dubai-origin HMS #1 and P&S sold at around $405-410/mt cfr Nhava Sheva.
Demand for imported scrap in India is expected to remain healthy for a few more days. Inventories have started to dip and steel prices are showing signs of a further increase. This could turn exports for many steelmakers.
The daily index for US-origin HMS 1&2 (80:20) settled at $413.5/mt cfr Nhava Sheva, up by $7.5/mt from Friday. Most suppliers are bullish and a decline in ferrous scrap in April could be lower than anticipated.
Offers for HMS 1&2 (80:20) from the UK and Australia were above $405-415/mt cfr Nhava Sheva on Tuesday on increased freight charges. Buyers’ expectations were $10/mt below the offer levels. A rise in the domestic scrap prices boosted inquiries for imported scrap. Trades for Turning, P&S, and busheling are still slow with most opting for HMS scrap with a short delivery period.
On Tuesday, shipbreaking melting scrap offers in Alang rose Rs800-900/mt. Melting prices were at Rs32,700-32,800/mt ex-Alang, up by Rs2,000/mt from Friday. Trades resumed actively in Mandi Gobindgarh as the strike was called off after an assurance from the ministry of finance to solve all GST-related issues. In Mumbai, rebar prices surged by Rs1,200/mt from Friday to Rs47,600/mt ex-works. But the possibility of new restrictions amid a resurgence of COVID-19 kept trades and transportation under pressure.
In China, recovering steel demand and strengthening sentiment kept prices supported. Spot imported iron ore 62pc ferrous content was at $167.5/mt cfr North China with a possibility of further rise in the coming days.
Amid an acute shortage of billets due to production cuts, domestic billet prices in Tangshan’s retail market reached a-12-and-half year high, hitting CNY4,790/mt ex-Tangshan on Tuesday, including VAT. Prices were up by CNY70/mt from Monday.
Ever Given vessel, which was stuck in the Suez Canal refloated after seven days easing logistical woes on the European route. Its impact was limited on steel prices. But it could take some more days for all the stuck vessel traffic to clear out.
Subcontinent
On Tuesday, following global cues and increase in weekly container freight charges on the US to Asia route pushed the daily Davis Index for containerized shredded Tuesday to $428.79/mt cfr Indian subcontinent, up by $6.76/mt. The daily index for containerized US-origin HMS 1&2 (80:20) settled at $409.61/mt cfr Indian subcontinent, up by $8.12/mt from Friday.
As per weekly containerized freight rates maintained by Davis Index, on the New York to South Asia route, freight charges were at $41.8/mt, $52.8/mt, and $74.5/mt to India, Pakistan, and Bangladesh, respectively.
($1=Rs72.49)