The Indian ferrous scrap market opened a bearish week pressured by lack of trades. Chinese sellers have lowered their HRC export prices amid low demand back home, forcing other countries to lower offers. Indian steelmakers too are a part of this wagon distressed to reduce offers, with a ripple effect on scrap purchases. This, mainly since domestic steel demand has persistently remained due to COVID-19 pandemic.
The Davis Index for HMS 1&2 (80:20) declined by Rs400/mt ($5.42/mt) from the prior Friday to Rs21,600/mt ($293.01/mt) del Mandi Gobindgarh mill and the index for sponge iron fell by Rs500/mt to Rs21,200/mt del mill. Most mills are seeking clarity in the price direction before booking scrap since the global scrap markets have shown signs of decline.
In Mumbai, the index for HMS 1&2 (80:20) fell by Rs100/mt to Rs22,900/mt del mill and the index for sponge iron declined by Rs300/mt to Rs19,000/mt del mill. The monsoon season has started its withdrawal, according to the Indian Meteorological Department. With the advent of dry season, construction activities are likely to pick up and thus drive steel demand. Markets could then see a glimmer of hope.