Indian steel mills were largely away from trades on Monday. Prices, however, were firm as the downstream demand continued to grow. Recovery in India’s steel sector after the pandemic is faster than earlier anticipated.
There were few inquiries for imported scrap, as buyers sought clarity in the global market parameters amid the US presidential elections and the impact of a second COVID-19 wave in Europe. Suppliers could raise asking prices by another $5 as they expect buyers to be in the market this week.
The Davis Index for containerized shredded on Monday settled at $323.64/mt cfr Nhava Sheva, up by $2.31/mt from Friday. Trades for shredded were at $322-324/mt cfr Nhava Sheva. Alloy makers continued to buy shredded amid limited inventories in hand. Offers were firm at $325-328/mt cfr Nhava Sheva since availability has declined and Pakistan mills were willing to pay higher than India.
The Indian currency depreciated further to Rs74.45 on Monday against $1 from Rs73.95 last week. This has dampened buying sentiment for a few mills. In the domestic market, the limited availability of Sponge iron has given its prices a lift.
Suppliers from the UAE preferred to offer in India buyers where trades materialized. The Davis Index for HMS 1&2 (80:20) from UAE, Monday, was at $313/mt cfr Nhava Sheva, up by $3/mt from Friday, with few trades reported at the index price. Trades for containerized #1 HMS without the cast and galvanized iron from Dubai were at prices above $315-320/mt cfr Nhava Sheva.
The Davis Index for US-origin HMS 1&2 (80:20) inched up by $2.58/mt to $313.75/mt cfr Nhava Sheva on Monday as trades picked 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 price levels. US suppliers could hold back from trades for higher prices in the coming days.
In the bulk market, US west coast suppliers kept offers firm due to indications of price rise in South Korea and Bangladesh. Taiwanese mills also increased their bids by $10/mt from the prior week.
On Monday, China’s October manufacturing PMI improved to 53.6 from 53.0 in September as production and new orders boosted the country’s economy. The PMI level was at its highest since January 2011. Business confidence in China rose to a six-year high, despite lower export sales. Chinese domestic billet prices gained CNY50-60/mt from a week earlier, indicating that export prices from India for billet and HRC could remain supported.
Around 90,000mt billets were sold by Indian mills last week in Indonesia, the Philippines, and China. These trades may encourage Indian mills to book more ferrous scrap containers. Prices for demolition vessels was rangebound at Rs23,000-24,000/ldt ($309-326/ldt) delivered Alang.
Improved trades and a shortage of containers resulted in the subcontinent indexes increasing. The daily Davis Index for containerized shredded, Monday, settled at $322.02/mt cfr India subcontinent, up by $1.51/mt from Friday. The daily Davis Index for containerized US-origin HMS 1&2 (80:20) was at $310.98/mt cfr India subcontinent, up by $2.27/mt.