Indian steel mills saw a recovery in demand for finished steel which improved trades for imported ferrous scrap. Offers rose as buyers resorted to restocking scrap inventories. Trades for HMS scrap concluded at higher prices but at a slow pace in the first half of the week. However, on Thursday, domestic steel prices, especially billet, lost steam and fewer buyers were interested in imported scrap.
In Turkey, the Davis Index for US-origin HMS 1&2 (80:20), Wednesday, was at $287/mt cfr, up by $2/mt from Tuesday. Turkish mills have received bulk orders from Southeast Asian markets for rebar with a possibility for scrap prices to climb another $5-10/mt in the coming days. Thus, traders are hoping for prices to rise in South Asia as well.
The Davis Index for containerized shredded on Thursday settled at $309.13/mt cfr Nhava Sheva, up $0.25/mt from Wednesday. Offers for UK-origin shredded were at $310-313/mt cfr Nhava Sheva. But there were hardly any bids in the market.
The Davis Index for HMS 1&2 (80:20) from UAE, Thursday, settled at $294/mt cfr Nhava Sheva, up by $2/mt from Wednesday. Deals for Dubai-origin HMS 1&2 (80:20) were at $292-295/mt cfr Nhava Sheva. Some offers were even heard at $295-300/mt cfr Nhava Sheva, up by $5/mt from late last week. Trades for containerized #1 HMS from Dubai were above $300-305/mt cfr Nhava Sheva.
A few containers for the UK-origin HMS 1&2 (80:20) sold at $305/mt cfr Nhava Sheva.
In the domestic market, with demand on the path of recovery, mills have returned to the market paying slightly higher for HMS scrap than the prior week. The secondary steel sector, however, is still struggling with weak demand for rebar from the real estate and construction sectors.
In the bulk market, offers for bulk cargoes rose on Thursday in line with global cues. No bulk trade for US-origin HMS 1&2 (80:20) materialized as buyers refused to match offers of $315-318/mt cfr Kandla on Thursday.
Export market awaits demand
In the export market, mills targeted $450-455/mt cfr Southeast Asia or $430-435/mt fob for square billets. Trades were limited due to high inventories on hand and uncertainty in the Chinese market.
Although Chinese iron ore prices have softened due to winter production curbs since Oct 1 and an import ban on coking coal from Australia, domestic rebar and HRC prices rose amid increased restocking. In the domestic market, Chinese billet prices dropped by CNY20 to CNY3390/mt ex-Tangshan on Oct 15.
Most mills in India’s West Coast have healthy orderbooks for semi-finished and finished steel exports which could lift ferrous scrap demand.
Expectations of recovery in ferrous scrap trades in Asian markets lifted subcontinental indexes. The Davis Index for containerized shredded, Thursday, settled at $302.53/mt cfr India subcontinent, up by $0.28/mt from Wednesday. The Davis Index for containerized US-origin HMS 1&2 (80:20) was at $286.43/mt cfr India subcontinent, up by $1.79/mt.