Imported ferrous scrap offers in India were firm on Tuesday. But softening domestic fundamentals pressured buying interest. Weak finished steel demand amid monsoon rains pressured rebar and ingot prices in various major markets, including Mandi Gobindgarh, Mumbai, and Chennai.
Increasing vaccination rates and many states in India have led to relaxations in the pandemic-related social distancing restrictions. This could keep prices supported as economic activity and cash flows return to normalcy.
The daily Davis Index for containerized shredded, Tuesday, rose by $2.68/mt to settle at $528.06/mt cfr Nhava Sheva. Offers were at $530-535/mt cfr Nhava Sheva, which buyers were unwilling to accept. In Pakistan, these levels have already found acceptance. Offers for imported scrap have neared a record-high, but bids from Indian buyers lagged at $525/mt cfr Nhava Sheva on Tuesday.
Offers for #1 HMS from the UAE were at $500-505/mt cfr Nhava Sheva. The daily index for UAE-origin HMS 1&2 (80:20) rose by $4/mt to $496/mt cfr Nhava Sheva with deals even at $495/mt cfr Nhava Sheva. Mills want prices to drop by $10/mt before they book materials as they found current levels high.
In Alang, melting scrap offers dropped by Rs500/mt to Rs37,000/mt ex-yards.
Amid high domestic offers and boosted HRC prices in the US, the daily Davis Index for US-origin HMS 1&2 (80:20) settled at $500/mt cfr Nhava Sheva, up by $2.5/mt. However, limited deals were reported for the US and UK-origin HMS in India as most feel prices have already reached a peak and could soften to match buyers’ expectations. Driven by weak steel sales during the Monsoon, buyers are pessimistic about a bullish market.
In China, steel futures dipped on Tuesday after trading resumed after the Dragon Boat holidays. Global iron ore supply remains tight from Brazil which pushed prices for ferrous content 62pc to $222/mt cfr China on Tuesday. For the domestic billet trades reported at $5,020/mt ex Tangshan, down CNY40/mt from Friday.
The daily Davis Index for containerized shredded, Monday, settled at $531.28/mt cfr Indian subcontinent, up by $2.73/mt; while that for containerized US-origin HMS 1&2 (80:20) settled at $502.32/mt cfr Indian subcontinent, up by $1.05/mt. Container supply-demand imbalance due to restrictions at Chinese ports has led to a possibility of another round of hike for freights by major shipping lines.