Secondary mills in India kept a close eye on markets as domestic demand for finished steel declined due to the ongoing monsoons, buying remained limited as the scrap supply crunch continued.
The daily Davis Index for HMS 1&2 (80:20) remained flat at Rs36,000/mt ($485/mt) del Mumbai mills and the index for sponge iron rose by Rs200/mt to Rs31600/mt del mills.
Markets in Jalna saw healthy demand. The daily Davis Index for HMS 1&2 (80:20) increased by Rs1300/mt to Rs35,000/mt del Jalna mills as ferrous scrap supply remained limited, the index for sponge iron rose by Rs300/mt to Rs33,400/mt del mills.
The supply of scrap could improve in the near term in the local market, as mills focus on imported scrap as the price gulf between domestic and imported scrap contracts.
Demand for ingot remained low in the North and the daily Davis Index for HMS 1&2 (80:20) declined by Rs200/mt to Rs36,400/mt del
Mandi Gobindgarh. The index for sponge iron settled flat at Rs35,500/mt del mills.
Mills in Chennai mostly bought scrap on a need basis as local demand remained low, the index for HMS 1&2 (80:20) rose by Rs200/mt to Rs33,200/mt del Chennai mills and the index for sponge iron rose by Rs100/mt to Rs30,900/mt del mills.
The bi-weekly index for HMS 1&2 (80:20) and sponge iron remained unchanged at Rs3500/mt and Rs31,200/mt del Duragpur mills, respectively.
Market participants expected an improvement in finished steel rates in the near term due to limited inventories in primary mills. A major primary steelmaker has also increased its TMT prices by Rs4500/mt due to low inventories. This price hike could keep domestic ferrous scrap prices firm for a while.