Indian imported ferrous scrap buyers were reluctant to book amid weak domestic steel demand. Steel prices have hit a two-month low lowering demand for ferrous scrap further. Mills lowered their bids by another $10-15/mt amid falling semi-finished and finished steel prices, which dropped over Rs1,000/mt ($13.7/mt) on Wednesday. Trades for HMS from destinations other than UAE also remain tepid.
The daily Davis Index for UAE-origin HMS 1&2 (80:20), Wednesday, dropped to $480/mt cfr Nhava Sheva, down $8/mt. Offers for HMS #1 from Dubai fell $10-15/mt from Monday to $490-495/mt cfr Nhava Sheva. Mills showed interest in loaded materials offered at $475-480/mt cfr Nhava Sheva on Wednesday.
The slowdown in construction activities because of extended restrictions and the impending arrival of monsoon is likely to significantly weigh on steel demand in the coming days. Large flat steelmakers have also turned cautious of demand sustainability and anticipate a slow June.
Following weak demand, some traders decided to liquidate arriving materials. Trades for 1,000mt containerized shredded from EU/UK reported at $510/mt cfr Nhava Sheva. Major alloy makers are largely away from the market. The Davis Index for containerized shredded settled at $511.25/mt cfr Nhava Sheva, down $1.25/mt from Tuesday.
The index for US-origin HMS 1&2 (80:20), Tuesday, settled at $490/mt cfr Nhava Sheva, down $2.5/mt as bids lagged on weak domestic fundamentals. Sellers were unable to collect scrap at lower prices amid a very slow collection rate.
The weekly Davis Index for cast iron, rotors, and drums, Wednesday, settled at $509/mt cfr Nhava Sheva, down by $5/mt. Low availability in supplier countries reduced offers at lower prices while buyers resisted high offers. The disparity between offers and bids led to no major trades again this week.
On Wednesday, melting scrap offers in Alang dropped Rs1,300/mt to Rs36,200/mt ex-yards. However, supply is tight. In Mumbai, rebar prices dropped by Rs1,000/mt to Rs48,200/mt ex-works, while ingot offers in the Mandi Gobindgarh slipped to Rs43,700/mt ex-works, by Rs200/mt on weak demand.
In China, spot iron ore prices for 62pc Ferrous content dropped in line with a fall in futures on Wednesday. In the spot market, rebar in Shanghai dropped by CNY150/mt to CNY4,750/mt ex-works. For ferrous scrap, Shagang steel announced its eighth price cut, lowering bids by CNY50/mt on Wednesday, which is a total drop of CNY600/mt since May 18.
The daily Davis Index for containerized shredded, Wednesday, settled at $514.68/mt cfr Indian subcontinent, down by $0.95/mt; while that for containerized US-origin HMS 1&2 (80:20) settled at $495.25/mt cfr Indian subcontinent, down $2.28/mt from Tuesday.