Indian ferrous scrap importers limited bookings to just-in-time inventory requirements. Though scrap prices are expected to stay bullish for at least a couple of months, some buyers are cautious about the resurgence of COVID-19 cases and related lockdowns in some regions. Also, end-user demand is yet to recover fully to boost trades.
On the other hand, domestic Sponge iron and iron ore prices in India have hit an all-time high, enabling suppliers to demand high prices for imported scrap. Mills will soon have no option but to import ferrous scrap at high prices, participants said.
In Turkey, imported scrap traded at $335-337/mt cfr Turkey. A strong appetite for imported scrap is likely to continue as many Turkish mills have billets and rebar orderbooks filled till Jan-Feb, said traders. Suppliers thus focused on the Turkish demand.
The Davis Index for containerized shredded on Monday settled at $360/mt cfr Nhava Sheva, up by $1.71/mt from Friday. Offers were high though there were no confirmed trades reported at these levels. Firm offers on Monday from the US and UK origins were in the range $360-365/mt cfr Nhava Sheva reaching two-year’s high. Following Sail, Tata Steel raised rebar prices by Rs1,500/mt on Monday. Steel prices are rising amid high raw material prices but demand is still very limited, said trader.
Traders from the UAE raised HMS offers amid active demand from Indian buyers. The Davis Index for UAE-origin HMS 1&2 (80:20) settled at $345/mt cfr Nhava Sheva, up by $3/mt from Friday. Offers for containerized #1 HMS without the cast and galvanized iron from Dubai were above $345-350/mt cfr Nhava Sheva on Monday, with a few deals reported at $345-348/mt cfr Nhava Sheva.
“Demand for the UAE material is expected to increase as the South African government has stopped issuing export permits imposing a ban on containerized exports. More details will be received in the month of January”, said a trader.
The resumption of rail services between Mundra port to Northern India, especially Punjab, would help mills get their imported materials sooners in the coming days. This will ease supply tightness and dependency on the domestic scrap and sponge iron which are trading at a record high.
The Davis Index for US-origin HMS 1&2 (80:20) was at $343.33/mt cfr Nhava Sheva on Monday, up by $3.33/mt from Friday. Offers for the grade in containers were above $340-345/mt cfr Nhava Sheva amid short supply depending on quality. There are no offers from the US and Australian bulk suppliers on Monday.
In the export market, billet makers are targeting not lower than $490-495/mt cfr SE Asia and China with no deals to report at those levels yet. No supplier is ready to offer bulk volume from India amid expectations of higher realizations domestically. Chinese producers offered domestic billets at CNY3,590/mt ex-Tangshan, down CNY30/mt on Monday.
The Davis Index for containerized shredded, Monday, settled at $359.99/mt cfr India subcontinent, up by $0.49/mt from Friday. The Davis Index for containerized US-origin HMS 1&2 (80:20) was at $342.57/mt cfr India subcontinent, up by $0.42/mt from Friday. Non-availability of containers pushed suppliers’ offers high in anticipation of short supply and strong demand in the future.
Taiwanese mills bought cautiously amid higher offers on Monday. A few deals were heard at $305-308/mt cfr Taiwan. The Davis Index for containerized US-origin HMS 1&2 (80:20) Friday rose by $2/mt to $305/mt cfr Taiwan. Feng Hsin raised finished steel and domestic ferrous scrap prices by TWD300/mt ($10.5/mt) and is likely to rise further to offset higher input costs and rising imported scrap offers. Feng Hsin’s base offers for rebar rose to TWD15,400/mt ex-works southern mill and TWD15,600/mt ex-works Northern mill. Feng Hsin ferrous scrap was at TWD8,000-8,300/mt.
The Davis Index for US-origin HMS 1&2 (80:20) in Turkey rose by $6/mt on Friday from Nov 18, pushing global ferrous scrap prices which many steel mills in Taiwan are not finding feasible to import.
Japan’s leading EAF steelmaker Tokyo Steel announced a third successive price hike in a week’s time. The first two were on Nov14 and Nov 17. Effective Nov 20, Tokyo steel raised ferrous scrap purchase prices by JPY1,000/mt ($9.6/mt) at three plants, Tahara, Okayama and Kyushu. As per market participants, export prices from Japan are expected to rise further with Taiwanese mills negotiating cautiously on limited demand from the domestic market and availability of domestic scrap.
($1= TWD28.5; JPY103.8)