Domestic ferrous scrap offers in Mandi Gobindgarh rose by Rs400-500/mt on increased demand for finished steel. The daily Davis Index for HMS 1&2 (80:20) rose by Rs375/mt($4.95/mt) in Mandi Gobindgarh to Rs19,725/mt del mills amid thin trades as scrap buyers looked for better deals.
The daily Davis Index for sponge iron settled flat in Mandi Gobindgarh to Rs18,400/mt del mills.
Steel mills in North are working at 50pc capacity due to a shortage of labour. The reduced steel output is driving retailers to stock up as much as finished steel as possible before an expected rise in steel prices.
In Western India, particularly in Maharashtra, the government could extend the lockdown till May 31 to avoid a community spread of the COVID-19 pandemic. Steel suppliers in Mumbai region are clearing pending contracts as there is no new demand in the domestic market. The daily Davis Index for HMS 1&2 (80:20) settled unchanged in Mumbai at Rs21,670/mt del mills and the index for sponge iron was flat at Rs17,600/mt del Mumbai mills.
Market participants are keen to resume business but they need clarity on how much demand will be generated with the announcement of the new government stimulus. If additional funding to small businesses restarts downstream activities and government-funded infra projects resume construction, demand for scrap and other raw material will improve.