Lockdowns imposed in various parts of the country amid rising number of COVID-19 cases is taking a toll on domestic ferrous scrap prices as it continued its downtrend in Mandi Gobindgarh.
As liquid oxygen supply has been diverted for medical use, production in mills has been severely hit. Labourers are returning back to their hometowns due to lack of work. Slowdown in construction activities has also aided this exodus. Consequently, demand for finished steel has weakened.
In Mandi Gobindgarh, the daily Davis Index for HMS 1&2 (80:20) dropped by Rs500/mt ($6.69/mt) to Rs35,050/mt ($464.39/mt) del mill on Monday. The index for sponge iron declined by Rs700/mt Rs32,000/mt del mill. Sponge manufacturers have opted to wait-and-watch as they expect prices to fall further. Limited deals were reported on Monday.
Offers for ferrous scrap in Mumbai rose on Monday as compared to Friday, amid tight supply. Mills are focusing on buying raw material from the local market to save transit time. The daily Davis Index for HMS 1&2(80:20) rose by Rs1,800/mt to Rs32,800/mt del Mumbai mills and the index for sponge iron declined by Rs400/mt to Rs29,300/mt del Mumbai mills.
Market participants are buying on a need basis as lockdown has led to transportation issues, and freight rates have also increased. Traders feel prices will improve after mid-May, when the supply of liquid oxygen for industrial purpose is expected to be normalized.
($1=Rs74.72)