Ferrous scrap prices on Thursday remained under pressure amid low demand from steelmakers. The daily Davis Index for HMS 1&2 (80:20) declined by Rs400/mt ($5.50/mt) to Rs34,700/mt del Mandi Gobindgarh and the index for Sponge iron settled flat at Rs32,000/mt del mills.
Mills are working at reduced capacity amid a shortage of industrial oxygen used for gas cutting works. Slow demand has forced suppliers to lower offers for ferrous scrap. In Jalna, the steel hub of Maharashtra scrap and sponge iron prices dipped on low demand. The bi-weekly index for HMS 1&2 (80:20) declined by Rs2,000/mt to Rs33,500/mt del Jalna mills.
The Eastern part of India is under a stringent lockdown. Additionally, the movement of vehicles and port activities are hampered due to heavy rainfall following Cyclone Yaas. The index for HMS 1&2(80:20) settled flat at Rs36,000/mt del Durgapur mills and the index for Sponge iron declined by Rs750/mt to Rs27,450/mt del mills.
Mills in Mumbai adopted the wait and watch strategy as they are expecting ferrous scrap prices to decline on global cues and low local demand. However, due to very tight supply prices remained firm on Thursday. The daily Davis Index for HMS 1&2 (80:20) settled unchanged at Rs33,500/mt and the index for Sponge iron declined by Rs1,350/mt to Rs27,850/mt del mills as sponge suppliers reduced their offers due to sluggish demand from the mills.
Ferrous scrap prices in Southern India remained flat and the index for HMS 1&2 (80:20) settled unchanged at Rs34,400/mt del Chennai mills and the index for Sponge iron declined by Rs1,500/mt to Rs28,100/mt del mills.
Offers for international scrap declined by $4-$8/mt due to domestic uncertainties in many importing countries and a drop in steel and iron ore prices in China. Most mills in India are delaying purchases to gain clarity on the price direction.