Domestic ferrous scrap prices trended flat to down on Thursday as steel prices started to come under pressure. Demand declined amid a fear that the lockdown could slow economic activities. Steelmakers bought limited quantities to meet their immediate production requirements.
The daily Davis Index for HMS 1&2(80:20) settled flat to Rs32,500/mt ($435.6/mt) del Mumbai mills while the index for Sponge iron declined Rs600/mt to Rs29,100/mt del Mumbai. The fall traders believe is temporary and demand is likely to soar once the lockdown in key states like Maharashtra and Chhattisgarh are lifted.
In Mandi Gobindgarh, the Davis Index for HMS 1&2 (80:20) settled flat at Rs34,950/mt del mill. Mills continued to opt for domestic scrap as imported scrap have continued to rise at a rapid pace. The price for HMS 1&2 (80:20) UK-EU origin cfr Nhava Sheva port has risen by $11/mt to $416/mt on April 7, compared to April 1. The demand for finished steel remained limited due to restrictions imposed by the state government amid a spike in COVID-19 cases.
The index for Sponge iron declined by Rs500/mt to Rs31,000/mt del mill, compared to a day prior as the buyers found the prices unviable. Logistical constraints due to partial lockdown in the state have also added to their woes. Offers for Sponge iron from Jharkhand were at Rs31,100/mt, down by Rs700/mt compared to Tuesday amid limited deals. Sponge iron manufacturers from Raipur and Jharkhand turned their focus to other regions for better margins, said traders.
The bi-weekly Davis Index for HMS 1&2 (80:20) remained unchanged at Rs 33,250/mt del Chennai mill due to tight domestic supply. Besides, holidays due to state assembly election also resulted in slow trading. Sponge manufacturers in the region reduced offers to boost sales ahead of a possible lockdown. The index for Sponge iron declined by Rs250/mt to Rs30,750/mt del Chennai mill.
In Jaipur, the bi-weekly index for HMS 1&2 (80:20) rose Rs50/mt to Rs33,300/mt del mill; while the index for Sponge iron was at Rs32,750/mt del mill, up by Rs150/mt.
Markets in Jalna also witnessed a sudden decline in prices but the traders are expecting raw material prices to recover soon as demand from mills is firm. The bi-weekly index for HMS 1&2 (80:20) declined by Rs300/mt to Rs31,700/mt del Jalna mills.
($1=Rs74.60)