Domestic ferrous scrap prices declined on Wednesday amid tepid demand from end-users. A majority of mills in Western, as well as Northern India, are working at reduced capacity due to a shortage of industrial oxygen. The daily Davis Index for HMS 1&2(80:20) declined by Rs300/mt ($4.10/mt) to Rs36,500/mt del Mumbai mills.
Bellary in Karnataka, a major hub for sponge iron producers, is under lockdown from Wednesday morning until May 24. Sponge iron from Bellary to supplied to various parts of Western India, including Mumbai, and restrictions could hamper transportation and production of sponge iron, thereby lifting prices. The index for sponge iron, Wednesday, rose by Rs75/mt to Rs31,175/mt del Mumbai mills.
In Mandi, ingot prices fell as steelmakers resisting scrap purchases amid sluggish demand from end-users. The daily Davis Index for HMS 1&2 (80:20) declined by Rs700/mt to Rs36,900/mt del Mandi Gobindgarh and the index for Sponge iron declined by Rs200/mt to Rs32,800/mt del mills.
Market participants are optimistic about firm ferrous scrap prices amid tight availability in the coming day. Also, low inventories could force mills owners to resume buying for immediate melt requirements.