Domestic ferrous scrap prices in India trended up amid tight supply and firm demand from local mills. Most mills are focusing on tapping export markets as domestic demand is low due to rising COVID-19 infections and stringent lockdown.
The daily Davis Index for HMS 1&2 (80:20) rose by Rs200/mt ($2.71/mt) to Rs37,000/mt del Mumbai mills and the index for Sponge iron increased by Rs800/mt to Rs31,900/mt del mills as input costs rose after major ore producer NMDC revised iron ore prices. Sponge producers in the country have hiked their asking prices to pass on the additional cost.
In the North, mills were seen stocking up their raw material inventories as they are expecting a further hike in ferrous scrap prices due to shortage. The daily Davis Index for HMS 1&2 (80:20) rose by Rs500/mt to Rs38,500/mt del Mandi Gobindgarh and the index for Sponge iron rose by Rs400/mt to Rs33,400/mt del mills.
In Raipur, the bi-weekly index for End cuttings rose by Rs450/mt to Rs38,950/mt del mill; while the index for sponge iron increased by Rs1,525/mt to Rs32,300/mt del mill.
In Jaipur, the index for HMS 1&2 (80:20) settled unchanged at Rs35,600/mt del mill while the index for sponge iron was up by Rs1,000/mt to Rs33,900/mt del mill. Transportation remains impacted due to COVID-19-related restrictions affecting the prices and availability of raw materials. Also, many secondary mills have been forced to idle their production because of a shortage of oxygen.
Mills in the eastern part of India struggled with a tight supply of scrap which raised offers. The bi-weekly index for HMS 1&2 (80:20) rose by Rs500/mt to Rs36,000/mt del Durgapur mills and the index for Sponge iron rose by Rs1050/mt to Rs31,000/mt del mills.
A majority of factories in Goa were shut due to the cut in oxygen supply, hence scrap collection came to a halt. The index for HMS 1&2 (80:20) rose by Rs500/mt to Rs32,500/mt del Goa mills and the index for Sponge iron rose by Rs1,300/mt to Rs32,000/mt del mills.
Market participants are expecting a further hike in finished steel prices which could spike ferrous scrap prices in the near term.