Yet another week opened with a surge in domestic ferrous scrap. For the past two weeks, prices increased in the first three days and then plateaued towards weekends.
On Monday, the Davis Index for HMS 1&2 (80:20) rose by Rs800/mt ($10.68/mt) from Friday to Rs22,000/mt ($293.65/mt) del Mandi Gobindgarh mill and the index for sponge iron rise by Rs150/mt to Rs21,150/mt del mill. Scrap prices rose on the back of an equal amount of a rise in ingot prices.
In Mumbai, the index for HMS 1&2 (80:20) rose by Rs700/mt to Rs23,200/mt delivered mill, and the index for sponge iron settled at Rs19,600/mt delivered mill, up by Rs500/mt. A rise in iron ore prices internationally have given sponge iron a lift. Iron ore prices hit one-year high $120/mt cfr China late last week to fall $2/mt on Monday. Still, from a week ago prices were up by $6-7/mt. Additionally, the wet season is also known to impact mining in India.
Scrap prices were also supported by a rise in billet export prices. Indian and Vietnamese suppliers offered billet at $430-435/mt cfr Manila. In the finished steel market, Indian rebar exporters doled out offers of $445-450/mt cfr Singapore and $450-460/mt cfr Hong Kong on an actual weight basis. These levels were at least $15/mt up from late-July, following strengthening sentiments in the domestic market.
However, market participants say it cannot be predicted if scrap prices this week could mimic the past two weeks’ trend of plateauing by Thursday.