Large-scale mills in India resumed bookings of imported ferrous scrap, albeit in limited volumes. But most other buyers are still away from the market amid a disparity between offers and buying interest. They chose to wait for global ferrous scrap prices to offer a clear price direction before procuring material.
But these steelmakers will not be able to stay away from importing scrap for a long time as inventories with most have started to dip and domestic scrap is in short supply.
In response to a call to stop production and scrap purchases as a mark of protest against the GST department, various local associations in the benchmark Mandi Gobindgarh have paused bookings. The GST department has been alleging irregularities in the documentation, which has not gone down well with traders and steelmakers.
Some market participants expect the situation to support Sponge iron prices in the coming days. But traders particularly feel its impact could be limited and not lead to any significant price rise.
Amid uncertainty due to renewed COVID-19 restrictions in many regions, trading activity subdued. A few suppliers were desperate to sell before prices drop further. Stockists, however, hope for prices to sustain. But with some states reeling under a heavy caseload of the COVID-19 virus, the situation in the construction segment remains uncertain.
The daily Davis Index for containerized shredded settled at $428.75/mt cfr Nhava Sheva, down by $1.25/mt from Monday, reaching its lowest point in a month. Most yards and traders kept their asking rates $5-10/mt higher than the index citing elevated freight rates and decreased availability of scrap in supplier countries.
In Turkey, after active buying, the appetite for imported scrap has subsided. Domestic scrap prices in Turkey dropped further to match buyers’ expectations. For bulk cargoes of HMS 1&2 (80:20), mills believe workable price levels stand at $430-435/mt cfr Turkey. Rebar export offers have remained unchanged at $640-645/mt fob Turkey.
The daily Davis Index for UAE-origin HMS 1&2 (80:20), Tuesday, settled unchanged at $395/cfr Nhava Sheva. Buying interest remained around $390/mt for the grade in anticipation of a further drop. Most furnaces in North and West India continued to resist high offers and opted for domestic material. A few sellers from Dubai offered HMS #1 and P&S were at $410-415/mt cfr Nhava Sheva with bids below $400/mt cfr Nhava Sheva.
Shipbreaking melting scrap prices in Alang, Tuesday, dropped by Rs400/mt to Rs30,600/mt ex-Alang. Demand remained weak following global cues. Ingot prices in Mandi were at Rs41,000/mt ex-works.
In China, imported iron ore with 62pc Fe content rose by $6/mt or CNY40/mt from $162.89/mt cfr North China on Monday. Domestic billet prices in the retail market dropped by CNY20/mt to CNY4,440/mt ex-Tangshan, including VAT. Tangshan government’s production restrictions are still in place, forcing many mills to cut output, lifting steel prices.
On Tuesday, the daily Davis Index for containerized shredded dropped to $428.96/mt cfr Indian subcontinent, down by $1.81/mt. The daily index for containerized US-origin HMS 1&2 (80:20) settled at $416.43/mt cfr Indian subcontinent, unchanged. Weekly containerized freight rates from the US East Coast, especially New York to South Asia, were unchanged.