Domestic ferrous scrap prices surged on Monday due to shortage and rise in finished steel prices. A major steelmaker has increased its HRC prices by Rs3,500/mt ($47.36/mt) which impacted ferrous scrap price, too.
The daily Davis Index for HMS 1&2 (80:20) rose by Rs925/mt to Rs34,500/mt del Mumbai mills and the index for sponge iron rose by Rs100/mt to Rs29,400/mt del mills.
Indian steelmakers are expected to hike prices further as China has tweaked its import and export levies on steel, which means China will be importing more to fulfil its growing demand.
In Mandi Gobindgarh, the daily Davis Index for HMS 1&2 (80:20) rose by Rs575/mt to Rs36,450/mt del mill amid scarcity of domestic scrap. The rise in imported scrap prices also gave domestic scrap prices a lift. The price for HMS (80:20) cfr Nhava Sheva rose by $11 on Monday to $440/mt, compared to April 29.
The index for sponge iron rose by Rs500/mt Rs32,200/mt del mill. Limited deals were reported at these levels.
Market participants expect ferrous scrap prices to move northwards as mills are tapping the export markets due to bleak domestic demand.