Lockdowns in select cities and regions of India has disrupted economic activities including ferrous scrap generation . A resultant shortage of scrap has boosted prices in many local markets.
In Mumbai, the daily Davis Index for HMS 1&2 (80:20) rose by Rs50/mt ($0.66/mt) to Rs20,650/mt ($274.77/mt) del mill after staying flat early this week. Amid the ongoing monsoons, most mills have scheduled maintenance activities and trades were very few. Moreover, finished steel demand is also under pressure. The index for sponge iron rose by Rs300/mt to Rs20,650/mt del Mumbai mill. With a shortage of ferrous scrap in the domestic market, many furnaces opted for sponge iron.
In Mandi Gobindgarh, the index for HMS 1&2 (80:20) and sponge iron both fell by Rs100/mt to Rs20,300/mt and Rs19,500/mt del mill, respectively. Scrap prices were weighed down by a similar fall in ingot prices.
Most Indian mills have their eyes set on the recovery of the real estate and infrastructure sectors since growth in the auto sector is expected to remain low. Automakers were already hit by weak demand before the COVID-19 pandemic, and the virus only made their struggle worse.