Indian mills hesitated to book imported scrap at present price levels and explored lower-priced options which increased inquiries. Despite bullish prices, some buyers fear a sharp drop in the prices mimicking the trend during the 2008 crisis, where prices had gained drastically. Most buyers were unclear about the price direction, which resulted in very limited deals this week.
Domestic steel and scrap prices on Tuesday either slowed their gain momentum or softened in major markets. A possibility of iron ore supply easing in case iron ore pellets are subjected to 30pc export duty could end the rally. Ferrous scrap traders were optimistic about demand and believe more deals could conclude in the coming days.
The daily Davis Index for containerized shredded settled at $450.31/mt cfr Nhava Sheva, up by $11.02/mt from Monday. Small-volume deals were heard at $445/mt cfr Mundra and $450-455/mt cfr Chennai early this week. Offers for shredded from the US and Europe/UK on Monday were above $450/mt cfr Nhava Sheva. Some sellers even quoted $470/mt cfr Nhava Sheva to check the buyers’ interest.
Domestic demand for rebar is strong in Dubai, and most traders chose to cater to the domestic scrap market. The Davis Index for UAE-origin HMS 1&2 (80:20) rose by $15/mt cfr Nhava Sheva to $435/mt cfr Nhava Sheva. Dubai suppliers offered #1 HMS at $435-440/mt cfr Nhava Sheva, but buyers targeted $420-425/mt cfr Nhava Sheva.
The daily Davis Index for US-origin HMS 1&2 (80:20) settled at $434.55/mt cfr Nhava Sheva, up by $13.87/mt. An absence of new offers and indications of a stronger domestic market in January aided the price rise. Buyers have turned silent and postponed restocking amid bullish offers. Suppliers were not ready for trades at bid levels of $415-420/mt cfr. Suppliers from South and West Africa stayed away from the market due to permit issues and low collection rates.
Billet update
Strength in the Chinese futures market drove domestic and Southeast Asian billet prices. On Tuesday, Chinese rebar and billet futures rose in the first session but dropped later amid volatility. Indian billet exporters are targeting $590-600/mt cfr Southeast Asia. Chinese domestic billet offered at CNY4,020/mt ex-Tangshan reaching record highs on Tuesday.
Subcontinent
The Davis Index for containerized shredded, Tuesday, settled at $450.79/mt cfr India subcontinent, up by $12.79/mt from Monday. The Davis Index for containerized US-origin HMS 1&2 (80:20) rose to $434.4/mt cfr India subcontinent, up by $13.8/mt from Friday, offers from US suppliers surged sharply driven by a jump in demand from East and Southeast Asian buyers. International containerised freight prices continued to trend up amid a shortage of containers in Asia, which is anticipated to take another two months to ease out.
($1=Rs73.81)