Indian mills were expected to resume trades for imported ferrous scrap, especially HMS, amid a gradual improvement in domestic fundamentals. But low bids led sellers to hold material on Tuesday. Buying of shredded, P&S and busheling grades remain subdued due to a wide gap between offers and bids.
Despite low inventories, most mills delayed restocking imported scrap and preferred domestic purchases at competitive prices. Receding monsoon and a dip in COVID-19 cases kept overall sentiment positive.
The daily Davis Index for containerized shredded, Tuesday, settled at $523.25/mt cfr Nhava Sheva, down $1.75/mt. Alloy makers showed limited interest in imported shredded.
On Tuesday, the Indian rupee appreciated to Rs72.98 against the US dollar compared to Friday’s close of 74.25. This could encourage scrap importers to resume trades while it dampens steel exporters’ sentiments.
The daily Davis Index for UAE-origin containerized HMS 1&2 (80:20) was at $472/mt cfr Nhava Sheva, down $3/mt. The market expects a pick-up before activities slow down in October-November amid festivities. For UAE-origin #1 HMS offers were around $480-485/mt cfr Nhava Sheva while trades heard at $480/mt cfr Nhava Sheva.
Indian bids lowered further on anticipation of a $10-40/mt dip in September monthly settlement prices in the US domestic market compared to August. The daily Davis Index for US-origin containerized HMS 1&2 (80:20) inched down by $1.25/mt to $477.5/mt cfr Nhava Sheva on Tuesday.
Trade activities resumed in the Alang shipbreaking market pushing domestic prices up by Rs500/mt to Rs36,200/mt ex-yards for melting scrap. On Monday, the market was closed for the Janmashtami celebration. In Mumbai, the asking prices for rebar dropped by another Rs200/mt on Tuesday to Rs48,800/mt ex-works on slow sales.
In Mandi Gobindgarh, ingots traded at Rs44,600/mt ex-works Tuesday, higher by Rs300/mt from a day prior. In Chennai, market inquiries for domestic and imported scrap picked up after a brief pause during the monsoon season.
International iron ore futures on Tuesday lowered by around 5pc following weak Chinese PMI numbers for August. Daily spot prices of Fe 62pc dropped below $157/dmt cfr North China on Monday. With no news of extra export tariff on steel products, export sentiments remain positive, but trades are yet to resume from China.
The daily domestic billet price in China on Tuesday was up CNY30/mt to CNY5,020/mt ($776.7/mt) ex-Tangshan inclusive of VAT. Offers for imported billet in China above $680-685/mt cfr as demand improved gradually. From India, billet export offers were at $605-610/mt fob basis with no deal reported.
Subcontinent
The daily Davis Index for containerized shredded on Tuesday, settled at $525.05/mt cfr Indian subcontinent, down by $1.2/mt; while that for containerized US-origin HMS 1&2 (80:20) settled at $485.25/mt cfr Indian subcontinent, down by $0.5/mt.
($1=Rs72.98; CNY6.46)