Domestic ferrous scrap prices in India were mixed on Tuesday. Most mills are taking a wait-and-watch approach as the effect of the Union Budget, presented on Monday, are yet to be seen. In South India, prices recorded a steep fall compared to other regions.
The bi-weekly Davis Index for HMS 1&2 (80:20) declined by Rs2,250/mt ($30.82/mt) to Rs25,250/mt ($345.90/mt) del Chennai mill
amid extreme volatility in the market. Uncertainty looms over revival of steel demand. Manufacturers said prices are likely to go further down in the near future amid weak global cues. Prices in Turkey have declined by $6.5 from Friday, to $409.8/mt. The index for Sponge iron, declined by Rs1,400/mt to Rs23,250/mt del Chennai mill, with limited deals.
In Mandi Gobindgarh, the daily Davis Index for HMS 1&2 (80:20) rose by Rs300/mt to Rs26,400/mt del mill, amid tight supply. Some traders are not ready to lower offers anticipating prices to rise in future. The index for P&S rose by Rs100/mt to Rs27,700/mt del mill. The offers for Sponge iron settled unchanged at Rs24,400/mt.
In Ludhiana, the indexes for busheling declined by Rs600/mt to Rs30,000/mt del mill, and HMS 1&2 (80:20) by Rs500/mt to Rs27,000/mt del mill. In the Union Budget on Monday, India’s finance minister has done away with the 2.5pc duty on steel scrap. The move could reduce the landed cost of imported material by around Rs800-1,000/mt. Although $1.5bn has been earmarked for infrastructure, it failed to lift the market sentiment.. Prices continued to be under pressure. The index for Sponge iron declined by Rs950/mt to Rs26,550/mt del Ludhiana mill.
In Indore, the bi-weekly index for HMS 1&2 (80:20) rose by Rs250/mt to Rs26,300/mt del mill, but the index for Sponge iron fell by Rs600/mt to Rs24,700/mt del mill. With imported ferrous scrap and Sponge prices unworkable, mills were heavily relying on domestic material. Availability of ferrous scrap in the domestic market has thus started dipping, giving prices a lift.
The Jaipur market was silent on Tuesday with steelmakers waiting for prices to decline further before buying material. The bi-weekly index for HMS 1&2 (80:20) fell by Rs600/mt to Rs26,200/mt del Jaipur mill, while the index for Sponge iron declined by Rs950/mt to Rs25,600/mt del mill. Mills cited persisting weak steel demand and resisted present price levels.
In Mumbai, the daily Davis Index for HMS 1&2 (80:20) and Sponge iron settled flat at Rs26,500/mt and Rs23,700/mt del mill, respectively. Market participants believe the domestic ferrous scrap market could end its downfall in the coming days.