The recovery in India’s domestic steel demand is likely to take as long as Q4 2020 (Oct-Dec). With the government’s announcement of allowing construction to resume in non-COVID-19 areas from April 20, ferrous scrap trades were expected to get a push. Scrap sellers, however, could land very few bookings.
The recycling industry has requested an extension in waiver of detention and demurrage charges at ports. There are around 60,000 containers piled up at Mundra port and the detention and demurrage charges on these would be heavy on traders’ pockets.
There were very limited offers in the market, but no mill was ready to place bids. The weekly Davis Index for containerised shredded increased by $8/mt to $261/mt cfr Nhava Sheva on Friday. Shredded in containers was offered at $260-265/mt cfr Nhava Sheva, but no buyers or traders were ready for transactions.
The Davis Index for containerised P&S 5ft settled at $265/mt cfr Nhava Sheva, up by $7/mt from the prior week. However, no trades were reported. The weekly Davis Index for busheling settled at $268/mt cfr Nhava Sheva, up by $5/mt. The weekly index for turning scrap settled at $228/mt cfr Nhava Sheva, up by $10/mt.
A shortage of domestic scrap is anticipated in the coming days on a significant drop in generation rates from demolition and manufacturing activities. Shipbreaking operations generating around 8,000mt of ferrous scrap per month could remain shut for at least a month.Also, the Indian currency depreciated to Rs76.4 levels on April 17 against US$ 1 from Rs75.97 on April 14.
HMS scrap offers rise on short supply –
The Davis Index for UAE-origin containerised HMS 1&2 (80:20) rose by $2/mt to $255/mt cfr Nhava Sheva. The Davis Index for HMS 1&2 (80:20) from the UK and Europe settled at $240/mt cfr Nhava Sheva, up by $5/mt from last Friday.Offers rose by $10/mt to $245/mt cfr due to limited availability with supplier yards.
South African ports are operational for exports, but no sellers were making ferrous scrap offers. Brazilian HMS 1&2 (80:20) was offered at $240-245/mt cfr Nhava Sheva. Australia-origin HMS 1&2 (80:20) traded at $250-255/mt cfr Nhava Sheva and Mundra, up by $5/mt from the prior week.
The Davis Index for US-origin HMS 1&2 (80:20) settled at $244/mt cfr Chennai, up by $6/mt from the prior week. The Davis Index for the UK and EU-origin HMS 1&2 (80:20) settled at $240/mt cfr Chennai, up by $5/mt from the prior week.