Domestic ferrous scrap prices in India continued to fall as a decline in steel prices impacted trades. Most mills preferred domestic scrap as seaborne material is priced at least Rs2,000/mt higher. The upward trend in global ferrous scrap markets did not support market sentiment in India. Opinions about the price direction of Indian ferrous scrap and steel markets were mixed. Some market participants believe steel prices might continue to fall and pull down the scrap further, while others believe in February, domestic steel and scrap prices could recover on global cues.

 

In Hyderabad, the bi-weekly indexes for HMS 1&2 (80:20) and P&S declined by Rs1,250/mt ($17.06/mt) to Rs29,400/mt ($401.39/mt) delivered mill and Rs29,850/mt delivered mill, respectively. Most traders had been offering limited volumes for the last few weeks on hopes of a continued rise in scrap prices through January. But since last week, demand for steel from the infrastructure sector has slowed with end-users unwilling to book material at high prices. A fear that ferrous scrap prices could fall led traders to increase volumes this week. Buyers seized the opportunity and negotiated at lower prices. 

 

The Davis Index for Sponge iron in Hyderabad declined by Rs600/mt delivered mill. Buyers rued of unviable offer prices.

 

In Indore, the index for P&S and HMS 1&2 (80:20) declined by Rs700/mt toRs30,050/mt and Rs29,500/mt delivered mill, respectively. The index for Sponge iron declined by Rs1,000/mt to Rs28,500/mt delivered mill. The downtrend is unlikely to sustain, believe mills.

 

In Ludhiana, the bi-weekly index for HMS 1&2 (80:20) and busheling settled unchanged Rs30,450/mt and Rs33,450/mt delivered mill, respectively. The index for Sponge iron fell by Rs500/mt to Rs29,550/mt del mill. Activity in the auto sector has dipped and affected the generation of busheling. A shortage of material could lift prices for the grade by at least Rs600/mt, opined traders. Construction and demolition activities have slowed, which could affect the generation of other scrap grades.

 

The bi-weekly index for HMS 1&2 (80:20) and Sponge iron settled flat at Rs32,000/mt and Rs28,500/mt del Chennai mill. Market activity continues to remain subdued ahead of the Pongal festival scheduled later this week and is expected to pick up from Jan 18.

 

The daily Davis Index for HMS 1&2 (80:20) declined by Rs700/mt to Rs28,600/mt del Mandi Gobindgarh mill amid limited activity. GST raids by the Directorate General of GST Intelligence (DGGI) has hampered trading in the market. The index for Sponge iron fell by Rs200/mt to Rs27,900/mt del mill. Most steel mills find these price levels unworkable. Some deals for P&S and HMS 1&2 (90:10) were heard at Rs31,000/mt and Rs30,500/mt del Mandi mill, respectively.

 

In Mumbai, the daily Davis Index for HMS 1&2 (80:20) remained unchanged at Rs29,000/mt del mill while the index for Sponge iron settled unchanged at Rs28,600/mt delivered mill. Despite a glut of scrap, sellers were unwilling to lower their offers due to firm prices for imported material. Prices for UAE-origin HMS 1&2 (80:20) rose by $42/mt to $445/mt cfr Nhava Sheva on Jan 11 from around a month ago.

 

In other regions, the bi-weekly index for HMS 1&2 (80:20) dropped Rs1,050/mt to Rs29,150/mt del Jalna mill. Like in Mandi Gobindgarh, bookings in the city dipped due to GST raids. Mills are expecting a further decline in prices on Wednesday. The index for Sponge iron declined by Rs500/mt to Rs28,000/mt del mill.

 

($1=Rs73.5)

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