Shipbreaking scrap prices continued to rise, driven by a week-long short supply of oxygen cylinders coupled shortage of tonnage in Alang for over a month. Mills restocked scrap amid fear of yards shutting because of slowdown in gas cutting activity for which oxygen cylinders are required.
The daily Davis Index for HMS attachment and Melting rose by Rs1,300/mt ($17.47/mt) each to Rs36,800/mt and Rs35,800/mt ex-Alang, respectively.
Shipbreakers increased their offers further for rolling scrap amid shortage of material. Supporting the price rise was also a firm semand from local mills in Gujarat.
The daily index for 4Ani rose by Rs700/mt to Rs38,900/mt ex-Alang while the index for 10Ani rose by Rs900/mt to Rs41,400/mt ex-Alang.
Domestic scrap rates surpassed those for imported. Offers for imported scrap were at $430-435/mt cnf India. But mills in urgent need opted for local scrap to avoid longer transit time.
The daily Davis Indexes for 12Ani and 14Ani rose by Rs900/mt each to Rs41,500/mt and Rs41,600/mt ex-Alang.
Demand from the construction sector is firm which is moving ship plates prices up. Builders have been allowed to continue work despite the lockdown provided they make arrangements for the labourers to stay on-site. The index for 1kg plates rose by Rs1,200/mt to Rs36,900/mt ex-Alang and the index for 2kg plates rose by Rs1,000/mt to Rs39,900/mt ex-Alang.
Traders expect prices to continue the upward trend till supply of oxygen cylinder normalizes.