Indian domestic scrap prices continued to decline on Tuesday as heavy rains in the western coast slowed demand and steel production. The bi-weekly Davis Index for HMS 1&2(80:20) fell by Rs550/mt ($7.40/mt) to settle at Rs24,000/mt del Ahmedabad as mills in Gujarat were shut on flood alert. The index for sponge iron dropped by Rs1250/mt to Rs20,450/mt del Ahmedabad.

 

In Punjab, the state pollution control board has demanded traders to obtain a one-time authorization from the board in order to import scrap. This may lead to increase in domestic HMS prices in the near term and lead to a shortage. Traders will now have to depend more on local scrap. Markets in Mandi rose on Tuesday after a pause on Monday. The daily Davis Index for HMS 1&2(80:20) rose by Rs200/mt to Rs21,900/mt del Mandi Gobindgarh. The index for sponge iron settled flat at Rs22,000/mt del-mills.

 

The daily Davis Index HMS 1&2 (80:20) settled flat in Mumbai to Rs23,100/mt and the index for sponge iron declined by Rs400/mt to Rs19,800/mt del Mumbai mills.

 

Demand for finished steel is yet to pick up in eastern India, hence scrap prices are moving southwards. The index or HMS 1&2 (80:20) fell by Rs1,500/mt to Rs25,000/mt del Durgapur, the index for sponge iron dropped by Rs1,500/mt to settle at Rs19,500/mt del Durgapur.

 

In the south, sentiments were similar with the index for sponge iron down by Rs500/mt to settle at Rs20,000/mt del Chennai, while the bi-weekly index for HMS 1&2 (80:20) settled flat at Rs23,000/mt del mills.

 

Traders are expecting scrap prices to remain under pressure till monsoon. An uptick in demand is expected on resumption of major infrastructural projects.

 

($1=Rs74.24)

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