Domestic ferrous scrap prices moved up on Tuesday amid tight supply as mills are still cautiously procuring raw material on a need basis.
Demand from the end-users is still low amid strict lockdown measures taken by the government. The daily Davis Index for HMS 1&2 (80:20) rose by Rs800/mt ($10.97/mt) to Rs36,200/mt del Mandi Gobindgarh and the index for Sponge iron rose by Rs700/mt to Rs32,700/mt del mills.
Major finished steelmakers that are focusing on export markets, have increased HRC prices by Rs3,150/mt and CRC prices by Rs4,900/mt.
Ferrous scrap prices in the steel hub of Maharashtra — Jalna — also increased amid low availability of local scrap. The bi-weekly index for HMS 1&2 (80:20) rose by Rs500/mt to Rs34,000/mt del Jalna mills.
Heavy rain in Mumbai and surrounding regions has slowed down the construction activities and the demand from steel consumers has slowed. However, there is still a supply shortage of ferrous scrap which is keeping the prices firm.
The daily Davis Index for HMS 1&2 (80:20) settled flat at Rs33,500/mt del Mumbai mills and the index for sponge iron rose by Rs300/mt to Rs28,700/mt del mills.
Mills in Goa which were shut since last two months due to the oxygen shortage are planning to get back into action in few days. There has been an increase in demand for sponge iron from the mills. The bi-weekly index for sponge iron rose by Rs1,000/mt to Rs28,500/mt del Goa mills and the index for HMS 1&2(80:20) settled unchanged at Rs31,000/mt del mills.
Markets in the South are still shut due to lockdown with no retail shops open till June 7. Mills are currently staying away from procuring ferrous scrap due to the low demand from the end-users. Scrap collection activities are also low due to the rising COVID-19 numbers and low production activity in the industries. The bi-weekly Davis Index for HMS 1&2 (80:20) settled flat at Rs34,400/mt del Chennai mills and the index for sponge iron rose by Rs700/mt to Rs28,800/mt del mills.
Markets in the East are slowly recovering from the devastation caused by cyclone Yaas but mills are still unable to procure scrap due to lockdown and slowdown in transportation activities.
The bi-weekly index for HMS 1&2 (80:20) rose by Rs200/mt to Rs36, 200/mt del Durgapur mills and the index for sponge iron rose by Rs1,050/mt to Rs28,500/mt del mills. Market participants are optimistic that ferrous scrap prices will improve in the near term amid global cues and tight supply. Domestic demand for finished steel is expected to get a boost only when the lockdown ends before the onset of monsoon.