Demand for imported ferrous scrap in India could improve in the coming days amid a sustained recovery in steel demand and prices. Chinese steel prices which dropped over 10pc since late Friday night triggered bearish sentiment. The risk of a potential third wave of COVID-19 in India added to the worries.
The daily Davis Index for containerized shredded on Tuesday dropped by $2/mt to $531.75/mt cfr Nhava Sheva. Offers for shredded from the UK/EU and the US were at $535/mt cfr Nhava Sheva, but buyers were interested at rates below $530/mt cfr Nhava Sheva.
The daily Davis Index for UAE-origin HMS 1&2 (80:20) declined by $3/mt to $469/mt cfr Nhava Sheva. Offers from sellers in the UAE remained firm as Indian buyers continued to bid lower. Imports could resume as soon as the gulf between imports and domestic scrap contracts. Trades could increase if prices declined by around $10/mt from the present levels.
Steel producers are expecting a slight recovery in demand as the monsoon recedes. Steelmakers are eyeing upto Rs2,000/mt hike in steel prices for August shipments.
The Davis Index for US-origin HMS 1&2 (80:20) dropped by $2.5/mt to $477.5/mt cfr Nhava Sheva on Tuesday.
The transporters’ strike continued in Alang’s shipbreaking market. Domestic scrap prices increased as supplies tightened. In Mumbai, the asking rates for rebar climbed by Rs200/mt to rs49,700/mt ex-works. In Mandi Gobindgarh, ingot traded below Rs45,800/mt ex-works. Improving domestic fundamentals led to a positive outlook for imported scrap.
On Monday, international iron ore Fe 62pc prices rebounded in the spot market to $183.4/mt cfr North China, up $2.9/mt.
In China, domestic billet prices, Tuesday, dropped by CNY70/mt from Monday to CNY5,100/mt ex-Tangshan inclusive of VAT. HRC futures maintained their downward trend losing around 4pc to CNY5,608/mt and rebar CNY5,247/mt in the closing session on Tuesday. Domestic spot steel prices for rebar and HRC declined by CNY50-100/mt.
Indian mills have turned cautious amid weak cues from China. Offers for billets dropped by $10-15/mt to $705-710/mt cfr China, with no buying interest. Billet export offers could drop to $680-685/mt cfr China, thus pressuring Indian export prices.
The daily Davis Index for containerized shredded settled at $535.20/mt cfr Indian subcontinent on Tuesday, down $3.30/mt, while the daily Davis Index for containerized US-origin HMS 1&2 (80:20) settled at $489.63/mt cfr Indian subcontinent, down by $3.75/mt.