Indian buyers are reluctant to book imported ferrous scrap amid domestic challenges. Offers for ferrous scrap remained stable despite a limited willingness from buyers.
Cyclone Tauktae continued to hit the western coast of India. In Alang, activities remained suspended for the second day on Tuesday. Indian mills continued to target exports orders, where prices are still higher than domestic market.
Offers for containerized shredded remained firm in the range of $520-525/mt cfr Nhava Sheva. The Davis Index for containerized shredded, Tuesday, settled at $520/mt cfr Nhava Sheva, up $1.25/mt from Monday. Mills, however, resisted shredded scrap bookings and turned cautious to ensure if these levels could sustain longer. Tight availability of shredded and busheling scrap, globally, supported high offers.
Importers operating from Kandla, Mundra, Nhava Sheva and Goa ports on Tuesday faced delays caused by cyclone Tauktae. Most states in the country have decided to extend COVID-19 related lockdowns for the rest of May, which could severely hamper economic activities.
The daily Davis Index for UAE-origin HMS 1&2 (80:20), Tuesday, remained unchanged at $498/mt cfr Nhava Sheva. Offers that hit a decade’s high last week remained firm on expectations of improving steel demand. Offers for HMS #1 from Dubai-origin above $505-510/mt cfr Nhava Sheva and upto $510-515/mt cfr Chennai.
Despite a considerable drop in new COVID-19 infections and some easing in oxygen supply, steel demand remains weak in India. A few secondary steel mills could restock as easing oxygen supplies helped some manufacturers resume fabrication and welding operations. Firming of Chinese steel prices could boost sentiment, traders said.
The index for US-origin HMS 1&2 (80:20), Monday, settled at $500/mt cfr Nhava Sheva, stable from Friday. Amid the non-availability of containers and severe logistic challenges, mills overlooked HMS offers from the UK and US yards.
In China, spot iron ore prices for 62pc Fe, increased above $217/mt cfr China on Monday, rising $7.5/mt. On Tuesday, iron ore futures continued their uptrend rising another 5-7pc after a sharp drop. Futures for rebar and HRC, however, showed limited upward movement due to the government’s serious stance against high prices. Chinese large mills continued to produce steel at a record pace boosting appetite for iron ore and ferrous scrap further. Amid falling inventories and optimism on sustaining demand, prices are likely to stay firm.
Spot steel prices continued to drop amid high inventories and a dip in steel futures on Monday. Billet prices fell by another CNY70/mt on Tuesday to CNY5,470/mt ($851/mt) ex-Tangshan including 13pc VAT. In the export market, Chinese buying interest for billet from Southeast Asia and India is expected to be around $700-720/mt cfr China. Lower billet and rebar prices could consequently pressure ferrous scrap, believe traders.
The Indian rupee appreciated to Rs73.05 against the US dollar on Tuesday from Rs73.50 on Monday. A stronger rupee is likely to encourage imports.
The daily Davis Index for containerized shredded, Tuesday, settled at $524.31/mt cfr Indian subcontinent, up by $2/mt; while that for containerized US-origin HMS 1&2 (80:20) rose to $504.88/mt cfr Indian subcontinent, up by $0.09/mt from Monday.