Imported ferrous scrap offers in India continued to trend up amid indications that major steelmakers plan to raise finished steel prices by Rs2,000-2,500/mt ($27-34/mt) in early January. Trades have resumed, but buyers purchased limited volumes. The increased market confidence about a bullish steel market aided trades. Secondary steelmakers in Gujarat, Punjab, and Jalna operated at lower capacities to cut their scrap requirements. Demand from Mumbai-based alloy and rebar makers, however, was strong as their inventories have started depleting.
A shortage of containers and the resulting rise in freight rates could continue for at least a month due to a mismatch between imports and exports. Importers may also face customs clearance delays leading to additional tariffs in the coming days.
Following bullish global cues, the Davis Index for containerized shredded on Thursday increased by $5.17/mt to settle at $432.5/mt cfr Nhava Sheva. Shredded buyers are trying to limit their purchases from the import market at present price levels. Shredded and busheling were offered at $435/mt and $455/mt cfr Mundra, respectively.
Asking prices for HMS scrap from Dubai and Kuwait increased as traders anticipate demand to rise further once suppliers in the US, Europe, Latin America, and Australia step away from the market for the new year holidays. The daily Davis Index for UAE-origin HMS 1&2 (80:20) settled at $413/mt cfr Nhava Sheva, up by $9/mt. Inquiries for containerized #1 HMS without the cast and galvanized iron from Dubai increased. Suppliers quoted $415-420/mt cfr Nhava Sheva, but buyers were interested at $405-410/mt cfr Nhava Sheva.
In Turkey, a few trades for bulk HMS 1&2 (80:20) were reported at prices equivalent to $433-435/mt cfr Turkey, with offers rising further. The bullish Turkey market sent reverberations to the South Asian markets, where offers are mimicking global cues, despite limited domestic demand. Traders believe prices for bulk cargoes have the room to increase by another $10-15/mt before the calendar year ends.
The daily Davis Index for US-origin HMS 1&2 (80:20) settled at $411.43/mt cfr Nhava Sheva, up by $6.79/mt, with trades at the index price. Offers for containers of the grade were at $415-420/mt cfr Nhava Sheva against bids of $400-405/mt cfr Nhava Sheva. Suppliers from South and West Africa stayed away from the market due to permit issues and low collection rates. Some trades for HMS 1&2 (80:20) from Australia and the UK were also reported at $410/mt cfr Nhava Sheva.
A strengthening billet export market could support scrap imports in India. The rise in input cost has driven sellers to keep their asking prices for billets above $550-560/mt cfr for buyers in China and Southeast Asia. Following the rising futures market in China, prices are expected to rise more in the coming days. In the domestic market in China, billet prices gained CNY30/mt to CNY3,690/mt ($564.8/mt) ex- Tangshan. Outlook for 2021 remained bullish, offering support to all markets.
The Davis Index for containerized shredded, Thursday, settled at $431.9/mt cfr India subcontinent, up by $5.36/mt from Wednesday. The Davis Index for containerized US-origin HMS 1&2 (80:20) rose to $411.68/mt cfr India subcontinent, up by $5.85/mt from Wednesday.