Indian steel mills are returning to the scrap market ahead of the Diwali festival holidays in India. The economic disruptions caused by the COVID-19 pandemic has changed global trade patterns including a general dip in imports by many countries including India. This reduced the availability of vessels for suppliers and increase in containers freight charges, which in turn has pushed up landed costing of imported scrap.
A few mills are preferring domestic scrap which is available at a lower price and with faster delivery times. While there is still uncertainty about domestic sentiments amid weak support from the billet exports market.
In Turkey, the daily Davis Index for Turkish imports of US-origin HMS 1&2 (80:20) slid by $0.17/mt to $289.50/mt cfr on Tuesday due to a lack of deals.
The Davis Index for containerized shredded on Wednesday settled at $314.94/mt cfr Nhava Sheva, up $1.94/mt from Tuesday. US-origin shredded Wednesday traded at $313-314/mt cfr Nhava Sheva while some UK-origin containerized shredded traded at $316/mt cfr Nhava Sheva. A Vizag-based buyer bought 3,500mt of shredded including some quantity from Australia.
Buyers resumed trades on indications of short supply in the coming days. Consumption rates have risen following improved steel demand. Supplies are expected to remain tight in November as December has been traditionally a shorter month, said a leading trader.
Domestic market demand has improved in the US and Europe, which has lead suppliers to raise offers for cast iron (rotors and drums). The weekly Davis Index for cast iron Wednesday settled at $339/mt cfr Nhava Sheva up by $4/mt from the prior week. Trades were limited.
The Davis Index for HMS 1&2 (80:20) from UAE, Wednesday, settled at $302/mt cfr Nhava Sheva, up by $2/mt from Tuesday, with few trades reported. Trades for containerized #1 HMS from Dubai were heard at above $305-310/mt cfr Nhava Sheva. Offers stayed at $305-308/mt cfr Nhava Sheva against bids of $300/mt cfr Nhava Sheva.
Germany and Belgium-origin Turning scrap in containers around 2,500mt traded at $290-292/mt cfr Vizag, equivalent to $280/mt cfr Nhava Sheva.
Domestic billet prices have remained under pressure impacting ferrous scrap bookings. In the export markets, offers for billets were heard at $425-430/mt fob, equivalent to $440-445/mt cfr SE Asia but no deals were heard. Around 30,000mt of Indian billet in tender sold at $418/mt fob to Sri Lankan buyer.
In the bulk markets, offers for HMS 1&2 (80:20) were still at $310-315/mt cfr Kandla, however, buyers refused to book materials at such high levels.
Improved trades and restocking activities resulted in subcontinent indexes moving up further. The Davis Index for containerized shredded, Wednesday, settled at $307.44/mt cfr India subcontinent, up by $1.09/mt from Tuesday. The Davis Index for containerized US-origin HMS 1&2 (80:20) settled at $294.84/mt cfr India subcontinent, up by $1/mt from Tuesday.