Indian buyers stayed away from booking imported ferrous scrap amid weak domestic fundamentals. Finished steel demand in the domestic market remains below expectation for mills.
In the last two days, Chinese steel prices declined by CNY300-400/mt ($47-62/mt) in the physical markets along with steel futures. The Chinese government’s stance to control the steel price rally has impacted the market. Thus, sentiment dampened in India as many mills were eyeing export opportunities amid weak domestic demand. As a result, inquiries for imported ferrous scrap slowed down.
The daily Davis Index for UAE-origin HMS 1&2 (80:20), Thursday, dropped to $496/mt cfr Nhava Sheva, down $2/mt. Offers for HMS #1 from Dubai were above $500-505/mt cfr Nhava Sheva while buyers were only below at $500/mt cfr Nhava Sheva. Buyers have started to unload imported material now that cyclone Tauktae has subsided.
Secondary steel furnaces, despite easing oxygen supply have remained away from scrap purchases due to low demand for finished products. Many small-scale mills are on the verge of production shutdowns due to a severe drop in finished steel consumption. Financial challenges because of firm raw material prices have pressured margins.
Offers for containerized shredded remained firm in the range of $520-525/mt cfr Nhava Sheva. The Davis Index for containerized shredded, Thursday, settled at $516.25/mt cfr Nhava Sheva, down $1.25/mt from Wednesday. Bids lagged at $505-510/mt cfr Nhava Sheva on weak steel demand.
The index for US-origin HMS 1&2 (80:20), Thursday, settled unchanged at $500/mt cfr Nhava Sheva in a silent market. Some mills were only interested in loaded material, which has room for negotiation by $10-15/mt over securing it from yards. Others were unwilling to opt for long transit deliveries amid the non-availability of containers and severe logistical challenges.
Indian mills were interested in Brazilian and West African containerized HMS at $475-485/mt cfr Chennai. Billet export deal for 30,000mt reported at $658/mt fob India; down from offers of $700/mt fob early week.
In China, domestic billet prices reached CNY5,150/mt ex-Tangshan on Thursday, down CNY150/mt from a day ago. Domestic scrap prices dropped by over CNY200/mt as Shagang steel announced price cuts. Rebar prices dropped by CNY185/mt to CNY5,435/mt ex-works and HRC lost CNY310/mt to CNY5,751/mt ex-works from a day ago.
Subcontinent
The daily Davis Index for containerized shredded, Thursday, settled at $520.63/mt cfr Indian subcontinent, down by $1.24/mt; while that for containerized US-origin HMS 1&2 (80:20) was at $505.03/mt cfr Indian subcontinent, up by $0.46/mt from Wednesday.
($1=Rs73.1)