Imported ferrous scrap offers in India continued to strengthen. Mills have decided to wait before booking more material. Many chose to focus on the sales of finished and semi-finished steel both in the domestic and export markets. Most states in India have relaxed pandemic-related restrictions and economic activity and cash flows will soon return to normalcy.
For the next couple of months, finished steel and raw materials prices could be firm on a supply crunch, believe some market participants. Steel demand is also expected to rise gradually post COVID relaxations. Ferrous scrap deals could, therefore, pick up soon.
The daily Davis Index for containerized shredded, Monday, rose by $1.02/mt to settle at $525.38/mt cfr Nhava Sheva. Offers went up to $530-535/mt cfr Nhava Sheva on Monday with the acceptance of equivalent price levels in Pakistan. Offers for imported scrap have neared a record-high but bids from Indian buyers lagged at $515-520/mt cfr Nhava Sheva on Monday.
Offers for #1 HMS from the UAE were at $500-505/mt cfr Nhava Sheva on Monday. The daily index for UAE-origin HMS 1&2 (80:20) rose by $2/mt to $492/mt cfr Nhava Sheva with deals in the range of $490-495/mt cfr Nhava Sheva.
Amid high domestic realization in the US, the daily Davis Index for US-origin HMS 1&2 (80:20) settled at $497.5/mt cfr Nhava Sheva, up by $1.25/mt. However, limited deals were reported for the US and UK-origin HMS in India as most preferred to buy UAE-origin material.
On Monday, domestic scrap and steel prices in India declined marginally from Saturday. But prices could recover soon on global cues believe many market participants. In Alang, Melting scrap offers dropped by Rs300/mt to Rs37,500/mt ex-yards. Normalized supply of oxygen for industrial use boosted gas cutting activities in the shipbreaking markets.
On Monday, Chinese steel trading was halted on account of the Dragon Boat holiday. Supply remains tight from Brazil which kept iron ore price for ferrous content 62pc firm at $219/mt cfr China on Friday.
A Chinese buyer booked 40,000mt of bulk pig iron cargo at above $600/mt cfr China from India which could lead to prices for pig iron, sponge iron and domestic scrap strengthening. This could also keep imported scrap elevated, believe traders.
The daily Davis Index for containerized shredded, Monday, settled at $531.28/mt cfr Indian subcontinent, up by $2.73/mt; while that for containerized US-origin HMS 1&2 (80:20) settled at $502.32/mt cfr Indian subcontinent, up by $1.05/mt.
On weekly normalized comparison, the containerized freight rates from New York port were unchanged at $44.66/mt to India, $50.49/mt to Pakistan, and $84.59/mt to Bangladesh, as updated on June 11. Container supply-demand imbalance due to restrictions in Chinese ports has led to a possibility of another round of hike for freights by major shipping lines.