Domestic ferrous scrap prices rose on Tuesday amid tight supply. Mills limited their buying to immediate melt requirements. Despite lockdown, steel production continues at usual capacity at mills that cater to the export markets.
The daily Davis Index for HMS 1&2 (80:20) rose by Rs500/mt ($6.77/mt) to Rs35,000/mt del Mumbai mills and the index for sponge iron rose Rs500/mt to Rs29,900/mt del mills.
In Ludhiana, the bi-weekly indexes for busheling increased by Rs650/mt to Rs39,000/mt del mill, while End cutting rose Rs750/mt to Rs38,700/mt del mill. Supplies remain tight because of lower generation due to production cuts in the manufacturing and auto sectors. The index for sponge iron declined by Rs150/mt to Rs32,200/mt del mill.
Steel prices, especially in the export market are firm which supported sellers to raise offers. Small-and-medium scale mills, however, are adopting a ‘just-in-time inventory strategy, given the uncertainty in the domestic market in the face of the COVID-19 pandemic.
In Jaipur, the bi-weekly index for HMS 1&2 (80:20) rose by Rs1,200/mt from last Thursday to Rs34,800/mt del mill; while the index for sponge iron increased by Rs300/mt to Rs32,300/mt del mill.
In Mandi Gobindgarh, the Davis Index for HMS 1&2 (80:20) rose by Rs600/mt to Rs37,050/mt del mill on Thursday as domestic scrap supply dried up in most regions. The index for Sponge iron increased by Rs100/mt Rs32,300/mt del mill. Mills are facing a supply crunch due to lockdown in Raipur and Jharkhand. Limited deals reported at higher levels.
The bi-weekly Davis Index for HMS 1&2 (80:20) dropped by Rs450/mt to Rs34,300/mt del Chennai mill. Steel productions at mills have gone down due to a lack of industrial oxygen. The index for sponge iron declined by Rs750/mt to Rs29,750/mt on limited trades.
Mills in Jalna are looking for ready to melt scrap as they are not able to feed oversized material into the furnaces due to a slowdown in gas cutting activities. On the other hand, there is a shortage of melt scrap. The bi-weekly index for HMS 1&2 (80:20) rose by Rs500/mt to Rs35,500/mt del Jalna.
Market participants are optimistic of an uptrend in ferrous scrap prices as they see enough room for steelmakers to increase their prices further as global steel prices continue to rise.