Imported scrap offers in India continued to rise on Thursday. Trading is expected to gain momentum in the coming days amid falling scrap inventories with mills. Some market participants believe large-scale mills could even opt for bulk trades after a four-month hiatus.
Bullish cues in China’s steel market are likely to support billet exports from India. Mills sold billets to African and Southeast Asian buyers at prices $15/mt higher than prior deals. Due to firm ferrous scrap prices, billet export offers could move up further.
The daily Davis Index for containerized shredded, Thursday, settled at $445.63/mt cfr Nhava Sheva, up by $10.38/mt. Prices for shredded increased by over $50/mt, while that for HMS 1&2 (80:20) have increased by $60-70/mt from early February.
Pakistani buyers showed a willingness to accept offers of $455-465/mt cfr Port Qasim. But Indian buyers kept their bids below $440-445/mt cfr Nhava Sheva. Sellers thus opted to sell their material in Pakistan.
Prices for UAE-origin material increased further supported by strong demand. Dubai-origin HMS #1 and P&S were offered at $415-425/mt cfr Nhava Sheva, levels which have already been accepted by Pakistani buyers. The daily Davis Index for UAE-origin HMS 1&2 (80:20) settled at $409/cfr Nhava Sheva, up by $10/mt.
On Thursday, ship-breaking scrap prices in Alang rose by Rs800/mt to Rs29,600/mt ex Alang. Shortage of domestic scrap and rising demand gave prices a lift.
Ingot prices in Mandi Gobindgarh rose by Rs400/mt from Wednesday to reach Rs39,000/mt ($537/mt) ex-works. On Thursday, an Indian primary mill booked an export for 30,000mt 3sp billets at $560/mt cfr Southeast Asia, up by $5-10/mt from the prior deals reported. Indonesian suppliers offered billets on Thursday at $580/mt cfr Philippines. Early this week, an Iranian supplier sold billets at $550/mt cfr Thailand.
The daily Davis Index for US-origin HMS 1&2 (80:20), Thursday, rose by $7.5/mt to $410/mt cfr Nhava Sheva. Amid strong domestic demand in the US, suppliers were unwilling to offer #1 HMS below $420/mt cfr Nhava Sheva. Thus, a few mills book HMS 1&2 (80:20) from West Africa at $380-390/mt cfr Nhava Sheva and Chennai.
In China, spot iron ore 62pc prices were at $169/mt cfr China on Wednesday. A jump in futures by 7-8pc is expected to push prices above $173-174/mt cfr China reaching the prior peak earlier this year. The resumption in Chinese billet, iron ore, and ferrous scrap imports could keep prices supported in the coming days.
The daily Davis Index for containerized shredded, Thursday, settled at $450/mt cfr India subcontinent, up by $9.61/mt. The daily index for containerized US-origin HMS 1&2 (80:20) settled at $414.35/mt cfr India subcontinent, up by $8.04/mt. The availability of containers is still low. Thus a steep decline in containerized freight rates seems unlikely until March.