Prices for domestic ferrous scrap in India were mixed. Although supply for scrap has started easing in some domestic markets, it remains scarce compared to demand.
In Ludhiana, the bi-weekly Davis Index rose by Rs500/mt ($6.77/mt) from Friday to Rs29,450/mt ($398.71/mt) del mill while the index for Sponge iron rose by Rs600/mt to Rs29,300/mt del mill. The momentum of gain has slowed in some places while in others, prices softened. But traders believe markets are unlikely to register a steep decline or go into a corrective mode.
The daily Davis Index for HMS 1&2 (80:20) dropped by Rs200/mt to Rs27,800/mt del Mandi Gobindgarh mill on the back of slow demand for finished steel. Mills have slowed trading and might remain away from markets until Jan 2021. Buyers also stayed away from imported scrap amid rising offers. The index for Sponge iron, however, rose by Rs450/mt to Rs29,100/mt delivered mill with no buying at those levels.
A lull in the market for a brief period is expected in January but once China returns to market after their New Year holidays, raw material prices, including iron ore could gain momentum, with a bearing on the Indian scrap market.
In South India, the bi-weekly index for HMS 1&2 (80:20) rose by Rs1,600/mt to Rs31,000/mt del Chennai mill on the back of healthy demand. A few buyers even booked imported scrap for January shipments to avoid supply disruption. Some even believe scrap prices could rise further next month. Demand for finished steel, however, remains weak. The index for Sponge iron rose by Rs500/mt to Rs28,000/mt del Chennai due to a limited iron ore supply. Some trades were heard at the index price.
In Mumbai, the Davis Index for HMS 1&2 (80:20) rose by Rs300/mt Rs29,300/mt del mill. The index for Sponge iron, however, settled flat at Rs28,100/mt.
In Jalna, the bi-weekly index for HMS1&2 (80:20) declined by Rs850/mt to Rs28,400/mt del mill, and the index for Sponge iron was up by Rs1,250/mt to Rs29,200/mt del mill.