The logjam in Indian imported ferrous scrap market continued on Wednesday amid increased disparity between offers and bids. Domestic steel prices fell weighing on imported scrap prices. Few deals heard amid harvest festivals in many parts of India. Offers for Dubai HMS scrap to Indian buyers fell by $15-20/mt, Wednesday, mirroring Rs2,000/mt ($27.32/mt) drop in domestic scrap and ingot prices in the past seven days.
Most industry participants believe that imported scrap prices might have peaked with Turkish bulk offers at $490/mt cfr Turkey. The global market remains bullish on stronger domestic demand in scrap exporting countries and low generation due to COVID-19 restrictions.
Domestic billet and rebar prices dropped for a second successive week pressured by low demand. Some mills continue to face tight liquidity conditions. Many sellers and buyers await their goods tax refunds and have urged the government to expedite the process.
The Davis Index for containerized shredded, Wednesday, settled at $487.91/mt cfr Nhava Sheva, down by $3.81/mt from Tuesday. Buyers were unwilling to book large volumes. Bids were $15-20/mt lower than offers at $475/mt cfr India. Shredded prices remain unviable for Indian mills as domestic steel prices have lost steam in the past two weeks.
The landed cost for imported HMS 1&2 (80:20) at $425-430/mt cfr Nhava Sheva computes to Rs32,000-32,500/mt delivered Mumbai mill, including import duties, freight, and port handling charges. While domestic HMS 1&2 (80:20) prices are at around Rs28,250/mt ($386/mt) delivered Mumbai mill. Mills, thus, preferred domestic over imports.
Dubai-based sellers accepted only a few bids which they believed were workable. The Davis Index for UAE-origin HMS 1&2 (80:20), Wednesday, settled at $439/cfr Nhava Sheva, down by $4/mt from Tuesday. Some suppliers offered #1 HMS at $450-455/mt cfr Nhava Sheva, but bids were below $435-440/mt cfr Nhava Sheva. Mills are interested in HMS scrap at $405-415/mt cfr Nhava Sheva.
Suppliers would have to offer #1 HMS at $415-420/mt cfr Nhava Sheva and mix HMS at $410/mt cfr Nhava Sheva, if they really want to sell materials to India, said a secondary steel maker.
Domestic ferrous scrap availability has eased, thus, Indian buyers are unwilling to raise bids. The price decline in the Indian domestic steel market could be temporary. With low inventories in hand, steel end-users could resume purchases and support steel prices in the coming days, believe traders.
Chinese steel prices showed a slight drop due to the impact of lockdown in the Hebei province and cold weather conditions leading to a pile up of inventories. Bids from Southeast Asian billet makers heard below $600/mt cfr Manila down $10-20/mt from last week. On Wednesday, Q235 150mm square billets prices in China were unchanged at CNY3,810/mt ex-works Tangshan including 13pc VAT.
Subcontinent
The Davis Index for containerized shredded, Wednesday, settled at $487.82/mt cfr India subcontinent, down by $3.54/mt from Tuesday. The index for containerized US-origin HMS 1&2 (80:20) settled at $445.37/mt cfr India subcontinent, down by $4.51/mt. International freight rates have continued to firm up in all South Asian routes as container shortage persists.
($1=Rs73.15, CNY6.46)