Indian ferrous scrap importers resumed trades for medium and low-grade scrap as prices dropped over $15-20/mt from last week’s peak. Still, offers for shredded and prime grades were firm despite almost nil demand due to tight supply. Finished steel demand has remained weak hit by the arrival of the monsoon season in almost all major markets impacting buying appetite.
With mixed cues in the global markets, mills began targeting lower prices for imported ferrous scrap. Yet, most sellers anticipate a limited downside, hoping that the correction, which was likely to happen has been already absorbed and prices will stabilize soon.
The daily Davis Index for containerized shredded, Wednesday, dropped by $1.25/mt to $525/mt cfr Nhava Sheva. Offers remained at $527-530/mt cfr Nhava Sheva, but buyers targeted below $525/mt cfr on Wednesday. The thin volume of shredded reportedly sold at index price from the US origin. A depreciated Rupee above Rs74 levels against the US dollar and logistic challenges globally may keep trades only on as per requirement basis.
The weekly Davis Index for cast iron, rotors, and drums, Wednesday, settled at $516/mt cfr Nhava Sheva, down by $4/mt though trades were reported as casting manufacturers improved production rates. Most offers were at $515-520/mt cfr Nhava Sheva. Imported cast iron scrap was offered in the domestic market in Mandi Gobindgarh at Rs38,000-38,200/mt delivered mills on Wednesday. Tight supply in the supplier countries and container shortages, kept traders unable to procure materials at lower prices.
The daily Davis Index for US-origin HMS 1&2 (80:20) dropped to $497.5/mt cfr Nhava Sheva, down by $7.5/mt. The steep decline in bids, driven by the availability of competitively priced UAE origin HMS, affected sentiments for booking the material from Latin America, UK, Australia, and Africa at higher prices.
In Chennai, offers for #1 HMS from the UAE were at around $490-495/mt cfr on Wednesday though bids fell following low steel demand due to the monsoon and abundant supply. The index for UAE-origin HMS 1&2 (80:20) dropped by $7/mt to $473/mt cfr Nhava Sheva. Trades picked up as prices dropped to $470-475/mt cfr Nhava Sheva on Wednesday. Mills were actively searching for lower-priced HMS and kept their bids at $450-455/mt cfr.
In Alang, melting scrap prices on Wednesday dropped by Rs600/mt to Rs36,100/mt ex-yards. Demand for scrap, however, was supported by casting manufacturers.
In Mumbai, rebar prices declined by Rs300/mt from Monday on subdued demand to Rs46,000/mt ex-works. In Mandi Gobindgarh, the ingot index also dropped by Rs300/mt to Rs44,200/mt ex-works on Wednesday.
In China, domestic billet prices continued to drop as the government increased drive to control commodity prices speculation amid inflation worries. Spot prices for billet recovered following rising steel futures and iron ore prices by CNY20/mt from Tuesday to CNY4,820/mt ($742/mt) ex-Tangshan inclusive of VAT. Steel futures showed recovery amid volatile sentiment. Iron ore prices for ferrous content 62pc rebounded successively for the last two days rising to $218/mt cfr North China on Wednesday.
Subcontinent
The daily Davis Index for containerized shredded, Wednesday, settled at $529.45/mt cfr Indian subcontinent, down by $1.93/mt; while that for containerized US-origin HMS 1&2 (80:20) settled at $502.38/mt cfr Indian subcontinent, down by $6.62/mt.
($1=Rs74.30)