Indian imported ferrous scrap market turned silent this week as finished steel sales have shown no signs of revival. Many medium and small-scale steelmakers have started lowering their output. Production in the country is estimated to be at 70pc capacity as mills want to avoid inventory pile-ups. The upcoming festivals like Navratri and Diwali could boost auto sales and support steel demand.
The daily Davis Index for containerized shredded settled at $307.75/mt cfr Nhava Sheva, Tuesday, down by $1.32/mt. Bids for imported ferrous scrap were at $300-305/mt cfr Nhava Sheva, but no supplier was ready to accept these levels. Only a few yards were in the market and offered shredded at $310-313/mt cfr Nhava Sheva. But buyers stayed away from shredded trades since these prices seem unviable for them, especially given the current market dynamics. They instead preferred imported HMS or domestic scrap which fit their budgets.
Support from export markets, especially Chinese HRC and billet importers has also slackened. Faced with a lack of sales avenues, mills are distressed by cash flow crunch, rising electricity tariffs, shortage of oxygen cylinders. But with the domestic ferrous scrap availability increasing, they could get some respite, especially since it could have a bearing on input costs.
Uncertainty in global markets, mainly due to China slowing trading ahead of the Golden Week holidays and the second wave of COVID-19 in the UK and other European countries, could dampen sentiment. As a result, imported scrap prices could also fall in the coming days.
In Turkey, the disparity between bids and suppliers’ expectations extended further as US-origin HMS 1&2 (80:20) bulk prices remained largely unchanged at $295-296/mt cfr Turkey. But some market participants believe Turkish mills could cave in and book bulk cargoes for October and November shipments.
In the bulk market, offers for HMS 1&2 (80:20) were flat in the range of $315-320/mt cfr Kandla. The gap between global prices and offers in the Indian market has narrowed by $5/mt. Still, buyers were unwilling to raise bids beyond $300/mt cfr Kandla.
In the billet export market, Southeast Asian buyers, especially those in Thailand and the Philippines, reduced bids by $5-10/mt from a week ago. A bulk trade for 40,000mt billets from Russia was heard at $450/mt cfr Philippines. Iranian mills also lowered billet export offers to $405-410/mt fob levels, down by $10/mt a week earlier.
The Davis Index for HMS 1&2 (80:20) of UAE-origin was at $291/mt cfr Nhava Sheva, down $1/mt from Monday. Deals for Dubai-origin HMS 1&2 (80:20) were at $290-292/mt cfr Nhava Sheva with bids even at $285-288/mt cfr Nhava Sheva on Tuesday. Low quantities of Dubai-origin #1 HMS traded at $295/mt cfr Nhava Sheva last week with offers in the range of $295-300/mt cfr Nhava Sheva on Tuesday.
The index for US-origin HMS 1&2 (80:20) settled at $290.21/mt cfr Nhava Sheva, down by $2.04/mt from Monday. Indian mills placed bids for the UK and US-origin HMS 1&2 (80:20) at $285-287/mt cfr Nhava Sheva. A few Indian mills, however, kept bids lower by $5/mt than current offers for imported scrap amid improving domestic scrap supply. Offers for HMS1&2 (80:20) from Europe, South America, and West Africa were flat at $285/mt cfr Nhava Sheva. Turning scrap was offered at $270-275/mt cfr Nhava Sheva.
The Davis Index for containerized shredded, Tuesday, settled at $305.11/mt cfr India subcontinent, down by $0.27/mt from Monday. The daily Davis Index for containerized US-origin HMS 1&2 (80:20) settled at $285.8/mt cfr India subcontinental Tuesday, a fall of $2.92/mt. Low bids in India and Bangladesh pulled the index down despite prices staying unchanged in Pakistan.