Indian mills were away from imported ferrous scrap bookings and purchased domestic scrap in a bearish market. Secondary mills announced production cuts by 30-40pc in major states to avoid losses. Fears over a third COVID-19 wave kept the market largely silent.
The daily Davis Index for containerized shredded, Thursday, settled up by $3.25/mt at $532.5/mt cfr Nhava Sheva on tight supply. Except for major alloy makers, most secondary furnaces in India were unwilling to accept present offer levels for imported ferrous scrap. Pakistani mills continued to book containerized shredded in the range of $540-542/mt cfr Qasim. Sellers thus lifted offers above $535-540/mt cfr Nhava Sheva on Thursday, refusing lower bids.
The Davis Index for US-origin HMS 1&2 (80:20) settled at $480/mt cfr Nhava Sheva, down $1.25/mt from Thursday on a decline in bids. No supplier from the US, Australia, UK, and Latin America was willing to match the present bids, which are lower by $40/mt against offer levels.
The daily index for UAE-origin HMS 1&2 (80:20) dropped by $1/mt to $454/mt cfr Nhava Sheva, also on low bids on Thursday. Many UAE sellers have now started resisting the bid levels below $435-440/mt for HMS 1&2 (80:20) and found prices in Pakistan more attractive. They believe Indian bids could recover to match global trends in the coming days.
In Alang, melting scrap prices on Thursday gained Rs100/mt to Rs33,900/mt ex-yards. In Mumbai, recovery in demand pushed rebar prices up by Rs200/mt to Rs46,200/mt ex-works successive. In Mandi Gobindgarh, around 50pc power cuts announced by the state from July 8- 18 is likely to shut operations at many heavy industries. Ingot prices remained ‘flat to up’ at around Rs43,000/mt ex-works.
On Thursday, Chinese steel futures for rebar and HRC rose by another 2pc. Trading for rebar and HRC in the domestic markets resumed and expected to pick up further, prices too could rise for the steel products on approaching summer season post-July. Domestic billet prices rose by CNY20/mt from a day ago to reach $5,020/mt ex-Tangshan inclusive of VAT. Iron ore prices for ferrous content 62pc were below $220/mt cfr North China.
Expectations from mills for billet exports were above $600/mt fob India as an increase in Chinese steel futures instilled positivity in the market. With most Southeast Asian countries under lockdown, demand for billets could stay slow.
The daily Davis Index for containerized shredded, Thursday, settled at $538.41/mt cfr Indian subcontinent, up by $2.7/mt; while that for containerized US-origin HMS 1&2 (80:20) settled at $495.31/mt cfr Indian subcontinent, down by $2.13/mt.