Indian ferrous scrap importers stayed away from the market considering firm prices. Mills opted for domestic ferrous scrap instead, availability of which is likely to lower. Since early November, imported ferrous scrap prices have increased by $70-75/mt or by 20-25pc, making it economically unviable for mills.
Finished steel inventories have started depleting in India amid rising demand. Mills are thus likely to buy imported material at prices $5-10/mt higher than the present price levels, should the availability of domestic scrap tighten.
The Davis Index for containerized shredded on Tuesday settled at $396.94/mt cfr Nhava Sheva up by $2.56/mt from Monday. After a deal for 500mt of shredded late last week at $392-393/mt cfr Nhava Sheva, offers on Tuesday were above $400/mt cfr Nhava Sheva, especially amid acceptance of these price levels by Pakistani mills. A few offers were also at $405-408/mt cfr Chennai on Tuesday.
Domestic markets could stay more lucrative for steelmakers over exports.
Globally, steel prices have increased by over 30pc in the last 20-25 days, driven by a shortage of raw materials. But considering the fast pace of the rise, some market participants believe a correction could be in the offing.
The Davis Index for UAE-origin HMS 1&2 (80:20), Tuesday, settled at $374/mt cfr Nhava Sheva, up by $3/mt from Monday and by $10/mt from Friday. Bids for mixed HMS were at $365-370/mt cfr Nhava Sheva. Offers for containerized #1 HMS without cast and galvanized iron from Dubai were at prices above $380-385/mt cfr Nhava Sheva.
The Davis Index for US-origin HMS 1&2 (80:20) was at $373.33/mt cfr Nhava Sheva on Tuesday, up by $3.33/mt from Monday. Fresh offers for containerized scrap for January-end shipments were at $375/mt cfr Nhava Sheva, with buying interest at $365/mt cfr Nhava Sheva on Friday. Bulk suppliers from the US and Australia were away from the market.
Semi-finished steel demand in Asia has recovered, but Indian mills opted to cater to the domestic market. High imported scrap prices pushed up billet export prices, with very few Indian mills offering material at prices over $530/mt fob India. International iron ore prices (Australian 62pc Fe content) maintained an uptrend reaching $147/mt cfr China on Monday with a possibility to touch the $150/mt cfr China mark in the coming days.
The Davis Index for containerized shredded, Tuesday, settled at $397.53/mt cfr India subcontinent, up by $2.30/mt from Monday. The Davis Index for containerized US-origin HMS 1&2 (80:20) was at $373/mt cfr India subcontinent, up by $2.8/mt from Monday.