Domestic ferrous scrap prices in India rose on Monday driven by bullish global ferrous scrap prices. Indian mills stayed away from trades due to increased scrap prices and weak domestic finished steel demand.
For domestic steelmakers, the US fails to provide a lucrative export market as steel products from India attract a 25pc duty. Despite US president Donald Trump’s India visit, mills believe this duty is unlikely to reduce. However, with China’s seaborne trade impacted, Indian mills are hopeful of increasing exports to other Asian countries.
The daily Davis Index for HMS 1&2 (80:20) rose by Rs350/mt (4.9$/mt) to Rs23,400/mt del Mumbai. On Feb 21, sponge iron rates increased by Rs400-500/mt as supply tightened. Before the GST filing due on Feb 20, sponge iron suppliers had liquidated their stocks at discounted rates. Demand, however, remained sluggish on Monday. The index for sponge iron settled flat Rs19,900/mt del Mumbai as trading thinned.
The daily Davis Index for HMS 1&2 (80:20) was flat at Rs22,100/mt del Mandi Gobindgarh and the index for sponge iron rose by Rs50/mt to Rs22,200/mt del Mandi Gobindgarh.
With no immediate infrastructure and real estate projects in the pipeline, traders expect demand for finished steel to stay subdued pressuring scrap prices in the near term.
($1 = Rs71.9)