Domestic ferrous scrap prices in India were bullish for yet another day on Tuesday. Finished steel prices also increased, but at a slower pace. Most market participants believe prices are likely to be uncertain for the coming few days. But a possibility of a decline in prices is at best remote.
In Indore, the bi-weekly Davis Indexes for HMS 1&2 (80:20) and sponge iron rose by 1,000/mt ($13.39/mt) from last Thursday to Rs24,500/mt ($328/mt) del mill and by Rs1,500/mt to Rs23,000/mt del mill, respectively.
In Jaipur, the bi-weekly index for sponge surged by Rs1,150/mt to Rs22,550/mt del mill and the index for HMS 1&2 (80:20) increased by Rs450/mt to Rs23,350/mt del mill. Most mills are facing a shortage of raw material, especially sponge iron due to a supply crunch of iron ore.
At many mines across central India, a change in management after fresh mining auctions is expected to delay mining activities by atleast a month. Supporting sponge iron prices is also a shortage of material. Most mills in the central part of India have resorted to exports leaving the domestic market somewhat dry.
The daily indexes for HMS 1&2 (80:20) rose by Rs300/mt to settle at Rs23,500/mt del Mumbai mill and Rs22,300/mt del Mandi Gobindgarh mill. The index for sponge iron in Mumbai rose by Rs400/mt del mill to Rs20,000/mt delivered mill and the index in Mandi Gobindgarh increased by Rs850/mt to Rs22,000/mt del mill.
Steelmakers believe uncertainty could reign the market until the first week of September at the minimum. Subsequently, prices could largely trend flat to up.
In South India, the bi-weekly indexes for HMS 1&2 (80:20) settled at Rs22,250/mt del Chennai, up by Rs250/mt and at Rs22,650/mt del Hyderabad mills, up by Rs650/mt.
The index for sponge iron surged by Rs1,150/mt to Rs19,350/mt del Chennai mill, and by Rs1,000/mt to Rs19,800/mt del Hyderabad mill.