Domestic ferrous scrap prices in India weakened on Tuesday amid low demand from mills. Sales of finished steel continue to be low amid reduced demand from end-users.
Mills in the North are cautious of securing raw material as they expect prices to decline further pressured by low demand. The daily Davis Index for HMS 1&2 (80:20) fell by Rs400/mt ($5.38/mt) to Rs35,800/mt del Mandi Gobindgarh and the index for sponge iron settled flat at Rs34,000/mt delivered mills.
The availability of ferrous scrap is still low in Mumbai. On the other hand, demand from mills is also weak. The daily Davis Index for HMS 1&2 (80:20) settled flat at Rs34,000/mt del Mumbai mills, and the index for sponge iron rose by Rs200/mt to Rs31,100/mt del mill.
Mills in Jalna booked material on a need basis as they have stockpiled inventories of finished steel. Suppliers lowered their asking prices for ferrous scrap to boost sales. The bi-weekly index for HMS 1&2 (80:20) declined by Rs500/mt to Rs34,000/mt del Jalna mills, and the index for sponge iron declined by Rs300/mt to Rs32,700/mt delivered mills.
In the South, lockdown restrictions are more rigid. Still, mills stocked raw material inventories, and the bi-weekly index for HMS 1&2 (80:20) rose by Rs200/mt from last Thursday to Rs35,700/mt del Chennai mills, and the index for sponge iron settled flat at Rs30,500/mt delivered mills.
Mills in Durgapur bought limited quantities of ferrous scrap as demand from end-users was slow. The bi-weekly index for HMS 1&2 (80:20) declined by Rs950/mt to Rs36,000/mt del Durgapur mills and the index for sponge iron settled flat at Rs30,000/mt delivered mills.
Market participants expect ferrous scrap prices to remain under pressure in the near term amid low finished sales. The bi-weekly index for HMS 1&2 (80:20) declined by Rs300/mt to Rs32,500/mt del Goa mills, and the index for sponge iron declined by Rs500/mt to Rs30,000/mt delivered mills.
($1=74.29)