Trades for imported ferrous scrap increased this week with buyers turning active for containerized HMS. Most steelmakers have ramped up production and a shortage of domestic scrap and sponge iron spurred trades for imported scrap.
Amid a spike in domestic steel prices by Rs1,500-2,000/mt in the last 10 days, most buyers were willing to raise their bids. This, despite slow end-user demand for finished steel.
In the western and the central parts of the country trades were comparatively slow due to Janmashtami holiday mid-week. Billet exporters failed to receive bids above $405-410/mt fob India or $430-435/mt cfr China and thus market sentiment dampened in the latter part of the week.
In the bulk market, a cargo of 40,000mt of HMS 1&2 (80:20) from the US West Coast was offered at $305-310/mt cfr Kandla. Bids, however, were at $300/mt cfr. Many buyers are expecting prices trend flat to down in the coming days and slowed bookings on Friday.
The index for containerized shredded settled at $314.17/mt cfr Nhava Sheva on Friday, up by $0.54/mt from a day ago and by $4.06/mt from the prior week. A steelmaker in the southern region booked US-origin containerized shredded at $314/mt cfr Mundra this week. Yards from the US and UK were offering material at $315-320/mt cfr Nhava Sheva on Friday, rejecting bids of $310-312/mt cfr Nhava Sheva.
A Mumbai-based automaker placed a bid for shredded at $305-310/mt cfr Nhava Sheva but the trade could not conclude at this price.
The Davis Index for UAE-origin containerized HMS 1&2 (80:20) settled at $300.75/mt cfr Nhava Sheva, up by $8.25/mt from the prior week. UAE suppliers preferred to sell into Pakistan post-Eid where prices are higher compared to those in India or Bangladesh.
A few trades for Brazilian and Australian-origin HMS 1&2 (80:20) were at $290-295/mt cfr Mundra and Nhava Sheva, up by $10/mt from the prior week. The weekly Davis Index for UK/Europe-origin HMS 1&2 (80:20) settled at $286/mt cfr Nhava Sheva, up by $9/mt from the prior week. Offers for UK-origin HMS 1&2 (80:20) were at $290-295/mt cfr Nhava Sheva. Higher dockside prices in the UK and European countries supported these offers.
The index for US-origin HMS 1&2 (80:20) settled at $297.86/mt cfr Nhava Sheva, up by $2.03/mt from Thursday and by $7.86/mt from the prior week. The index for South African HMS 1&2 (80:20) settled at $295/mt cfr Nhava Sheva, up by $7/mt from the prior week.
South African sellers returned to the market this week after almost a month-long gap. With their government tightening the noose around ferrous scrap exports, most traders faced issues with licenses. With permits finally in place, the supply crunch in Indian markets is set to ease in the coming days, believe market participants. This could lead to scrap prices losing some steam in the coming days.
In Goa, mills increased inquiries for imported scrap amid a sharp rise in the domestic sponge iron prices. Mills in Chennai bought West Africa-origin HMS 1&2 (80:20) at $280-285/mt cfr Chennai, prices which were up by $5-10/mt from the prior week.
The weekly indexes for busheling and P&S in containers settled at $326/mt cfr and $313/mt cfr Nhava Sheva, up by $6/mt from the prior week. Few offers for busheling were at $335-340/mt cfr Vizag.
The weekly index for Turning scrap rose by another $6/mt to $271/mt cfr Nhava Sheva. With the price gap between Turning scrap and shredded remained stable. Still, trades for lowered grade scrap picked up. Brazilian suppliers refused to accept lowered bids from steelmakers and opted to wait as they expect prices to rise.
The Davis Index for containerized shredded, Friday, settled at $309.59/mt cfr India subcontinent, up by $1.29/mt from Thursday but almost unchanged from last Friday. The Davis Index for containerized US-origin HMS 1&2 (80:20) settled at $293.48/mt cfr India subcontinent.