Domestic ferrous scrap prices in India recorded a mixed trend on Tuesday, largely governed by local market dynamics. In major Indian markets, however, offers rose fuelled by a rise in imported scrap prices.
In Indore, the bi-weekly Davis Index rose by Rs500/mt ($6.70/mt) from the prior Thursday to Rs21,800/mt ($291.96/mt) del mill and the index for sponge iron increased by Rs200/mt to Rs19,600/mt del mill as the market struggles with limited domestic scrap supplies. Low demand is pressuring finished steel prices in many markets and thereby squeezing mill operators margins.
The daily index for HMS 1 &2 (80:20) in Mumbai rose by Rs300/mt to Rs21,000/mt del mill and the index for sponge iron settled unchanged at Rs16,700/mt del mill. Higher imported ferrous scrap prices supported domestic scrap sellers to raise their offers. Bullishness in the global ferrous scrap market is the result of increased buying activity in Turkey. Turkish mills bought US-origin HMS 1&2 (80:20) at $265/mt cfr on Monday, this price level was up from around $260/mt cfr Turkey on the Friday prior.
In North India, price trends were flat to down. The bi-weekly indexes for HMS 1&2 and sponge iron fell by Rs250/mt to Rs22,250/mt and Rs19,750/mt del Ludhiana mill, respectively. The steel production rate is still lower than usual. The daily indexes for sponge iron and HMS 1&2 (80:20) settled unchanged at Rs19,500/mt and Rs20,300/mt del Mandi Gobindgarh mill, respectively.
In South India, the bi-weekly Davis Index for sponge iron rose by Rs300/mt from the prior Friday to Rs16,500/mt del Chennai mill and the index for HMS 1&2 (80:20) increased by Rs500/mt to Rs22,500/mt del Chennai mill. Construction activities in Chennai are likely to pick up sooner than other parts of India as monsoon arrives late in the region. At present, along with COVID-19 spread, monsoons have kept construction activities subdued in many parts of India.
($1=Rs74.67)