Domestic ferrous scrap and sponge iron prices in India were largely up on Thursday tracking bullish sentiments in the global ferrous scrap market.
In Ludhiana, the bi-weekly Davis Index for HMS 1&2 (80:20) rose by Rs500/mt ($6.68/mt) to Rs22,750/mt ($304.16/mt) and for sponge iron increased by Rs200/mt to Rs19,950/mt del mill. A rise in scrap prices along with pressured finished steel demand in the north has distressed most mills. Steelmakers are delaying production ramp up and scrap purchases till the market presents clear fundamentals. The daily index for HMS 1&2 (80:20) in Mandi rose by Rs200/mt to Rs20,300/mt del mill and the index for sponge iron declined by Rs300/mt to Rs19,200/mt del mill.
Scrap prices in Mumbai, however, were unchanged on Thursday and the daily index for HMS 1&2 (80:20) settled at Rs21,200/mt del mill, while the index for sponge iron rose by Rs300/mt to Rs17,000/mt del mill.
Hoping to ride the bullish wave in the global scrap markets, sponge iron manufacturers raised their offers on Thursday. The bi-weekly index for sponge iron in Indore rose by Rs400/mt from Tuesday to Rs20,000/mt del mill the index for HMS 1&2 (80:20) fell by Rs100/mt to Rs21,700/mt del mill.
In South India, the Chennai ferrous scrap market also mimicked global price trends. The bi-weekly index for HMS 1&2 (80:20) and sponge iron rose by Rs500/mt to Rs22,000/mt and Rs17,700/mt del mill, respectively. Besides the firmness in the global ferrous scrap market, a rise in billet prices by around Rs575/mt also supported the increase. Finished steel prices, however, are still under pressure causing a margin squeeze for many manufacturers.