Indian steel mills were in wait-and-watch mode on Thursday after booking substantial volume in containers early this week. Inquiries for imported scrap continued with limited intent to restock. The economic push from the Indian government’s end and easing of transport restrictions could churn deals in the coming days, therefore, Suppliers were firm on asking prices for containers and bulk.
Container scarcity persists as trade remains hampered amid uncertainty in the international market due to the US presidential elections and the impact of a second COVID-19 wave in Europe.
The Davis Index for containerized shredded on Thursday settled at $320.54/mt cfr Nhava Sheva, up by $0.68/mt from Wednesday. Trades for shredded were at $320-321/mt cfr Nhava Sheva. Suppliers from Australia and the US increased offer volumes amid improved demand from Indian buyers. Offers were firm at $322-325/mt cfr Nhava Sheva since availability declined whereas Pakistan is paying higher than India, said a trader.
Many buyers in North India are still facing financial problems, regulation issues and scarcity of containers. The Indian currency depreciated further, crossing the Rs74 mark to Rs74.25 on Thursday against the US dollar. The depreciation has dampened buying sentiment for a few mills. In the domestic market, Sponge iron prices have hit a 20-month high due to a supply crunch, presenting traders an opportunity to boost trades.
The Davis Index for HMS 1&2 (80:20) from UAE, Thursday, reached a six-week high at $310/mt cfr Nhava Sheva, up by $1/mt from Thursday, with few trades reported at index prices. Trades for containerized #1 HMS without the cast and galvanized iron from Dubai crossed the $310-313/mt cfr Nhava Sheva mark. Offers were over $312-315/mt cfr Nhava Sheva.
The daily Davis Index for US-origin HMS 1&2 (80:20) inched up by $2.58/mt to $311.08/mt cfr Nhava Sheva on Thursday amid trades picking-up. Suppliers are offering bulk cargoes of HMS 1&2 (80:20) at $320-325/mt cfr Kandla, but buyers showed limited interest at these prices.
Chinese appetite for domestic billet has increased since China-based mills are unwilling to pay higher for imported billets. Thus, in the export market, Indian mills offered billets firm at $450-455/mt cfr Southeast Asia but with limited buyers. Chinese steel prices received strong support with sustained demand and optimism about the next five-year plan (2021-2025) which was drafted on Thursday.
Improved trades and a shortage of containers resulted in the subcontinent indexes increasing. The Davis Index for containerized shredded, Wednesday, settled at $319.94/mt cfr India subcontinent, up by $1.51/mt from Tuesday. The daily Davis Index for containerized US-origin HMS 1&2 (80:20) was at $307.97/mt cfr India subcontinent, up by $1.57/mt.