Indian imported HMS scrap prices remained largely stable amid limited trades. Most mills were taking a cautious approach against restocking ferrous scrap amid volatile domestic prices and subdued finished steel demand. Mills expect prices to soften. On Monday, the market was largely in a wait-and-watch mode to gain clarity on the price direction.
In Turkey, the daily US-origin HMS 1&2 (80:20) settled at $301.75/mt cfr Turkey Friday, down $0.75/mt from a day prior. Turkish mills have started offering rebar to the US market as Southeast Asian demand has cooled off. Appetite for ferrous scrap bookings has slowed down in Turkey.
The daily Davis Index for containerized shredded on Monday fell to $323.13/ mt cfr Nhava Sheva down $1.87/mt from Friday. Few UK yards still offered containerized shredded at $325-330/mt cfr Nhava Sheva and Mundra. Some offers from Europe; Australia origins were at $320-325/mt Cfr Nhava Sheva. Limited trade concluded as higher prices for shredded were non-viable for Indian mills struggling with weak domestic demand.
Indications of a slight correction emerged in the market, however, most other suppliers were confident that there won’t be sharp drop amid tight supply.
The daily Davis Index for HMS 1&2 (80:20) of UAE-origin settled at $309/mt cfr Nhava Sheva Monday, down by $0.19/mt from Friday. Deals for Dubai-origin HMS 1&2 (80:20) were at $305-310/mt cfr Nhava Sheva. Suppliers refused to accept lower bids of $300/mt cfr Nhava Sheva. #1 HMS scrap from Dubai yard traded at $310/mt cfr Nhava Sheva. A few trades from Australia and Brazil reported at $300-305/mt cfr Nhava Sheva.
The index for US-origin HMS 1&2 (80:20) Monday settled at $307.5/mt cfr Nhava Sheva, down $0.5/mt from Friday. Most suppliers have diverted their attention to Taiwan and Turkey markets where they are being paid than South Asian markets.
A bulk vessel MV Hanyang would discharge 33,600mt ferrous scrap at Kandla port. The cargo was booked around two months ago. In the bulk market, offers from US west coast were at $325/mt cfr Kandla, however, mills were only interested at around $300/mt cfr Kandla.
Billet export at higher prices
A Gujarat-based steelmaker sold 25,000mt billets at $425-430/mt fob India or $455/mt cfr SE Asian buyer in line with rising offers from Iran and CIS suppliers. Increased billet prices in the export market could support mills to pay high for imported scrap. A few mills are waiting for prices to drop in the coming days.
In the domestic market, weak demand and limited construction activities put pressure on the domestic market. Ingot, billet and rebar prices remained under pressure and dropped by Rs400-700/mt on Monday.
Supply tight in North
In northern India, scrap supply remained tight amid recovering demand. This despite the fact that most mills, barring major steel producers, are operating at 60-80pc capacity. Major steelmakers have ramped production and are banking on their ability to export either billets or HRC at higher prices.
Many Indian ferrous scrap importers had avoided port and demurrage charges during COVID-19 and failed to clear shipments from ports. This is holding up traders and suppliers from taking an additional risk as COVID-19 cases surge in India.
Small and medium scales EAF and induction furnaces have become non-competitive in the market. Shortage of scrap at cheaper levels is resulting in heavy losses for the secondary industry as they are unable to maintain their cash flows.
The Davis Index for containerized shredded, Monday, settled at $315.42/mt cfr India subcontinent, down $2.98/mt from Friday. The daily Davis Index for containerized US-origin HMS 1&2 (80:20) settled at $300.13/mt cfr India subcontinental, down $0.27/mt from Friday.