Domestic ferrous scrap prices declined on Tuesday as mills stayed away from new bookings. A significant drop in international iron ore prices pressured sponge iron and HMS prices in many Indian markets.
In Durgapur, the bi-weekly Davis Index for HMS 1&2 (80:20) declined by Rs800/mt to Rs35,700/mt del mills and the index for sponge plunged by Rs1,200/mt to Rs30,000/mt del mills.
The bi-weekly Davis Index for HMS 1&2 (80:20) in Raipur fell by Rs800/mt to Rs34,800/mt del mills as sales remained scarce, while the index for sponge declined by Rs1,700/mt to Rs29,700/mt del mills.
In Mumbai, tight availability of scrap supported prices. The daily Davis Index for HMS 1&2 (80:20) remained flat at Rs34,700/mt ($467.66/mt) del Mumbai mills and the index for sponge iron settled flat at Rs31,300/mt del mills.
North India also faced supply tightness. In Mandi Gobindgarh, the daily Davis Index for HMS 1&2 increased by Rs200/mt to Rs35,600/mt del mills, while the index for sponge iron remained flat at Rs35,400/mt del mills.
In Indore, the bi-weekly Davis Index for HMS 1&2 (80:20) also fell by Rs700/mt to Rs35,800/mt del mills and the index for sponge dipped by Rs2,100/mt to Rs31,700/mt del mills.
In Chennai, the bi-weekly Davis Index for HMS 1&2 (80:20) declined by Rs200/mt to Rs33,000/mt del mills and the index for sponge iron fell by Rs600/mt to Rs30,400/mt del mills.
A drop in international iron ore prices reduced the incentives for exports for major sponge iron and pellet producers in India. These mills have diverted sales into the domestic market, thereby easing supplies. Whereas the demand for sponge continues to be low which led to a fall in prices.
($1=Rs74.21)