Ferrous scrap price trends were mixed on Tuesday, but sponge iron prices remained largely firm in the Indian market. Most secondary mills believe prices for raw material are set to lose steam in the coming days.
In Ludhiana, the bi-weekly Davis Indexes for HMS 1&2 (80:20) and sponge iron rose by Rs250/mt ($3.34/mt) to Rs24,750/mt ($331.37/mt) and Rs900/mt to Rs24,600/mt del mill from last Thursday, respectively. The availability of sponge iron in the city is close to nil.
The All India Induction Furnaces Association has written a letter to India’s Prime Minister Narendra Modi seeking a ban or a 30pc duty on exports of raw iron ore pellets. The association states exports of the raw material has increased the input cost, distressing secondary steelmakers.
In Jaipur, the bi-weekly index for sponge rose by Rs900/mt to Rs23,450/mt delivered mill and the index for HMS 1&2 (80:20) surged by Rs400/mt to Rs24,400/mt del mill. Mills were unwilling to accept the current offer levels. Some secondary steelmakers are even facing an issue with their cash flows and are unlikely to be in the market for the next few days at the minimum. Adding to their woes is also a weak finished steel demand.
Despite weak demand, the word around is state-owned steel producers and some other major private players are raising finished steel prices. But distributors state, at the raised price levels, they will stay away from stocking material.
The daily indexes for HMS 1&2 (80:20) fell by Rs100/mt to settle at Rs24,000/mt del Mumbai mill and by Rs250/mt to Rs23,200/mt del Mandi Gobindgarh mill. The indexes for sponge iron settled unchanged at Rs21,750/mt delivered Mumbai mill and Rs23,000/mt del Mandi Gobindgarh mill. The supply of scrap in these areas has eased. Pressuring ferrous scrap prices was also a lack of finished steel demand.
In Chennai, the bi-weekly index for HMS 1&2 (80:20) increased by Rs800/mt to Rs23,000/mt delivered mill and the index for sponge iron rose by Rs1,000/mt to Rs20,500/mt delivered mill. Mills this week returned to the market after a brief break. Sellers, therefore, raised their offers.