Indian domestic ferrous scrap prices dropped on Tuesday in the absence of demand. The daily Davis Index for HMS 1&2 (80:20) in Mandi Gobindgarh dropped by Rs300/mt ($3.96/mt) to Rs19,900/mt ($263.04/mt) del mill. The daily index for sponge iron remained unchanged at Rs18,600/mt del Mandi Gobindgarh mill.
Stalled construction projects are yet to resume due to lack of liquidity despite the economic stimulus provided by the Indian government. Most mills have liquidated their built-up finished steel inventory and remain inoperative as they face a shortage of casual labourers. This could suppress ferrous scrap prices in most Indian markets for the while, but due to the ban on ferrous scrap exports from UAE, prices of domestic scrap, as well as imported scrap, are expected to increase as buyers look for alternatives.
In Chennai, the bi-weekly index for HMS 1&2 (80:20) remained unchanged at Rs19,850/mt del mill and the index for sponge iron fell by Rs125/mt to Rs17,150/mt del mill. Due to the absence of finished steel demand in the local market, the traders stayed away from booking scrap.
In Hyderabad, construction activities have resumed slowly and cautiously at many sites after the government accorded permission to carry out construction activity. As the markets were shut for a long time due to COVID-19 outbreak, the traders were trying to offer construction material at premium prices to cover up for the loss borne during the lockdown.
The index for HMS 1&2 (80:20) remained unchanged at Rs22,250/mt del Ahmedabad and the index for sponge iron fell by Rs1,025/mt to Rs18,350/mt del Ahmedabad.
Steel mills in Jalna were operational till May 17, but have again shuttered operations due to surge in COVID-19 cases. In Jalna, the bi-weekly index for HMS 1&2 (80:20) and sponge iron remained unchanged at Rs21,950/mt and Rs19,675/mt del mill, respectively.
Manufacturers in Mumbai are unable to restart work as they remain cautious due to an increase in the number of COVID cases. Additionally, the state government has extended the lockdown till May 31, however, construction and industrial activities are allowed even in red zones. The daily Davis Index for HMS 1&2 (80:20) and sponge iron remained unchanged at Rs21,670/mt and Rs17,800/mt del Mumbai mills, respectively.
($1= Rs75.64)