Prices for domestic ferrous scrap and Sponge iron in India remained firm. Imported scrap prices have reached levels unviable for secondary mills, who are thus vying for trades in the domestic market.
The bi-weekly index for HMS 1&2 (80:20) rose by Rs900/mt ($12.22/mt) to Rs28,300/mt ($384.50/mt) del Jaipur mill, and the index for Sponge iron was up by Rs900/mt to Rs28,300/mt del mill.
Demand for finished steel in India has started to recover, with infrastructure projects picking pace. However, most end-users are operating at lowered margins and are thus looking to reduce the input cost. A trader informed Davis Index that the market is likely to go into a corrective phase in the next couple of weeks. Some mills fear there is a likelihood of dumping of Chinese HRC in the market, which could pressure steel prices.
In Indore, the index for HMS 1&2 (80:20) increased by Rs700/mt to Rs29,000/mt delivered mill, while that for Sponge iron increased by Rs1,350/mt to Rs27,550/mt del mill.
The daily Davis Index for HMS 1&2 (80:20) rose by Rs300/mt to Rs27,600/mt del Mandi Gobindgarh mill. Mills could stay silent till prices lose steam. The index for Sponge iron settled flat at Rs28,250/mt del mill. Mills resorted to trades only on a need basis.
In Mumbai, the Davis Index for HMS 1&2 (80:20) settled flat at Rs28,000/mt del Mumbai with a few trades at the index price. The index for sponge ironrose marginally by Rs50/mt to Rs27,550/mt del mill.
In South India, the bi-weekly index for HMS 1&2 (80:20) rose by Rs1,200/mt to Rs29,450/mt del Chennai mill on the back of strong global cues. Some manufacturers preferred imported scrap from high seas sales basis amid vessel delays and container shortage.
A mill operator alleged that some Sponge iron manufacturers are creating artificial scarcity, which is driving prices up. The index for Sponge iron rose by Rs900/mt to Rs27,400/mt del Chennai.
The index for HMS 1&2 (80:20) rose by Rs1,250/mt to Rs27,550/mt del Hyderabad mill, and the index for Sponge iron increased by Rs500/mt to Rs26,700/mt del mill. Finished steel demand is likely to be aided by the upcoming Metro Rail projects in Chennai.
In other regions, the bi-weekly Davis Index for HMS1&2 (80:20) rose by Rs800/mt to Rs28,300/mt del Jalna mill. The index for Sponge iron increased by Rs1,450/mt to Rs27,150/mt del mill with limited trades reported at those levels.