Domestic ferrous scrap prices increased on Tuesday on the back of tight supply and moderate demand amid marker uncertainty.
In Mandi Gobindgarh, the Davis Index for HMS 1&2 (80:20) rose by Rs400/mt($5.35/mt) to Rs35,450/mt del mill on Thursday. Mills focussed on raising scrap volumes to maintain inventory levels as they stare at an extended lockdown. A few deals were heard at the current levels.
The index for sponge iron rose by Rs100/mt Rs32,100/mt del mill on Tuesday with limited deals.
In Chennai, the bi-weekly Davis Index for HMS 1&2 (80:20) rose by Rs1,250/mt to Rs34,750/mt del mill amid shortage of scrap. Mills are unable to import scrap due to container shortage. The index for sponge iron increased by Rs1,000/mt to Rs30,500/mt del mill fuelled by rise in iron ore prices globally.
Mills in Mumbai were seen buying on a need basis, however, after stocking raw material last week, they were silent on Tuesday. Tight supply of ferrous scrap resulted in unchanged offers. The daily Davis Index for HMS 1&2 (80:20) and sponge iron settled flat at Rs32,800/mt and Rs29,300/mt del Mumbai mills, respectively.
In Jaipur, the bi-weekly index for HMS 1&2 (80:20) rose by Rs600/mt to Rs33,500/mt del mill, while the index for sponge iron settled unchanged at Rs32,000/mt del mill.
In Ludhiana, the bi-weekly index for HMS 1&2 (80:20) was up by Rs500/mt to Rs34,000/mt del mill; while that for busheling was up by Rs1,450/mt to Rs38,350/mt del mill. The price rise was steeper for industrial grade scrap compared to that for demolition, as manufacturing has slowed amid lack of enough workforce and oxygen cylinders.
In Hyderabad, the bi-weekly index for HMS 1&2 (80:20) was at Rs31,300/mt del mill, up by Rs800/mt and the index for sponge iron settled at Rs28,800/mt del mill, down Rs600/mt from last Thursday.
The steel hub of Maharashtra, Jalna, saw a spike in demand from the mills. However, shortage of ferrous scrap moved its prices northwards. The bi-weekly index for HMS 1&2 (80:20) rose by Rs10,00/mt to Rs34000/mt del Jalna mills.
Market participants are expecting ferrous scrap prices to improve further as availability of scrap in local market is low and demand from the finished steel makers is firm.
($1=74.62)