Domestic ferrous scrap prices in Mandi Gobindgarh lost steam on Wednesday. The daily index for HMS 1&2 (80:20) fell by Rs200/mt ($2.68/mt) to Rs20,900/mt ($279.69/mt) del mill and the index for sponge iron settled unchanged at Rs19,800/mt del mill.
Most mills believe the bullishness in scrap and sponge iron is unlikely to sustain. The market was unable to absorb the price rise as steel end-users are yet to start operating at pre-COVID-19 levels. A major steelmaker believes by mid-August, sponge iron prices across all markets are likely to fall by a total of Rs1,000/mt from the present price levels. Imported scrap prices too are likely to fall by $15-20/mt in the coming days, weighing down domestic scrap prices.
With the train services yet to resume, labourers are unable to travel for work. The construction industry, a major driver of steel demand, therefore, remains operational at a slow pace.
In the Mumbai market, the index for HMS 1&2 (80:20) rose by Rs100/mt to Rs22,100/mt del mill, and the index for sponge iron settled unchanged at Rs18,850/mt del mill.
($1=Rs74.72)