Ferrous scrap prices in the Indian domestic ended their downtrend as most sellers tried to raise their offers. But most market participants believe the market will not be able to absorb the rise in prices since finished steel demand remains under pressure.
In the North, the daily Davis Index for HMS 1&2 (80:20) rose by Rs400/mt ($5.47/mt) to Rs27,600/mt ($377.75/mt) del Mandi Gobindgarh mill. Since past few weeks, most mills have focused on domestic scrap purchases priced competitively over imported material. This has resulted in a dip in the availability of scrap. The index for Sponge iron fell by Rs500/mt to Rs24,900/mt with limited deals. Mills exercised caution and bought limited volumes as they expect prices to fall.
The bi-weekly Davis Index for HMS 1&2 (80:20) and End cuttings settled unchanged at Rs26,050/mt del Indore mill and Rs27,500/mt delivered mill, respectively. The index for Sponge iron was at Rs25,300/mt delivered mill, also unchanged. In a week, prices for ferrous scrap in the Indore market have declined by around Rs1,000/mt. But on Thursday, sellers were unwilling to lower their asking prices further. Mills, on the other hand, were not keen on trades at these levels. The resulting standoff between buyers and sellers kept the index unchanged in Indore.
In South India, the bi-weekly index for HMS 1&2 (80:20) declined by Rs500/mt to Rs27,500/mt del Chennai mill amid limited demand for finished steel. The index for Sponge iron rose by Rs250/mt to Rs24,650/mt amid limited activity.
The bi-weekly indexes for HMS 1&2 (80:20) rose by Rs600/mt to Rs26,200/mt delivered Hyderabad mill, End cuttings rose by Rs500/mt to Rs27,600/mt delivered mill, while Sponge iron rose by Rs800/mt to Rs25,400/mt del mill. Mills in the city have started to cut production to avoid oversupply in a weak finished steel market. In the coming days, therefore, demand for scrap could fall and pull down prices, believe market participants.
In Mumbai, the daily Davis Index for HMS 1&2 (80:20) declined by Rs250/mt to Rs26,750/mt del mill. Sponge manufacturers expect demand for Sponge iron to pick up and kept their offers unchanged. Thus, the index for Sponge iron settled flat at Rs24,650/mt del mill.
In other markets, the bi-weekly index for HMS 1&2 (80:20) rose by Rs300/mt to Rs26,800/mt del Jaipur mill, while the index for Sponge iron increased by Rs250/mt to Rs26,550/mt del mill.