Domestic ferrous scrap prices in India declined further on Tuesday, weighed down by weak global cues and a continued decline in finished steel demand and prices. The daily Davis Index for Turkish imports of US-origin HMS 1&2 (80:20) fell by $14.17/mt to $457.50/mt cfr on Monday amid lower bids and offers. With Turkish mills lowering their seaborne scrap prices, asking prices in the Indian import market also declined, pulling down domestic scrap prices.
In Ludhiana, the bi-weekly index for HMS 1&2 (80:20) fell by Rs1,750/mt ($23.92/mt) to Rs28,250/mt ($386.26/mt) delivered mill with trades heard at prices in the range of Rs28,000-28,500/mt del mill. The index for busheling dropped Rs2,250/mt to Rs31,000/mt del mill. Apart from the softening global ferrous scrap market, prices were dragged down by a decline in semi-finished steel prices in Mandi and Ludhiana. Steel semis have declined by Rs1,900/mt from last Thursday in the Ludhiana market.
Amid weakening finished steel demand and prices, most mills preferred to buy domestic HMS over imported scrap, Sponge iron, or even higher-grade scrap to reduce their input costs. The index for Sponge iron declined by Rs650/mt to Rs28,600/mt del Ludhiana mill. Price levels for Sponge iron remain unviable for steelmakers and thus chose to stay away from purchases.
The daily Davis Index for HMS 1&2 (80:20) declined by Rs200/mt to Rs27,400/mt del Mandi Gobindgarh mill with limited activity at present price levels. The index for Sponge iron settled flat at Rs26,650/mt del Mandi mill. Most steel mills expect prices to drop further due to a lack of finished steel demand.
In Indore, the bi-weekly index fell by Rs1,500/mt from last Thursday to Rs28,000/mt delivered mill, while the index for Sponge iron declined by Rs2,000/mt to Rs26,500/mt delivered mill.
In South India, the bi-weekly index for HMS 1&2 (80:20) declined by Rs1,500/mt to Rs30,500/mt del Chennai mill. Many mills have already stocked up inventories and thus stayed away from fresh purchases. Some steelmakers also faced liquidity crunch due to low finished steel demand in the country. Market sentiment seems to be bearish for the coming days. Pellet sponge offers were at Rs26,050/mt delivered mill, down by Rs2,450/mt, with limited trades since mills found scrap prices more viable.
The bi-weekly Davis Index for HMS 1&2 (80:20) declined by Rs900/mt to Rs27,500/mt del Hyderabad mills, and the index for P&S 5ft fell by Rs850/mt to Rs29,000/mt del mill. Prices declined due to the weakening global cues. The index for Sponge iron fell by Rs1,600/mt to Rs25,850/mt del mill.
In other daily priced markets, the index for HMS 1&2 (80:20) declined by Rs775/mt to Rs27,975/mt del Mumbai mill, while the index for Sponge iron fell by Rs600/mt to Rs26,050/mt del mill.