Sentiment in the Indian imported scrap market remained negative, dragging down bids. Indian Rupee depreciated to a 12-week low against $1 to reach Rs74.92 on Monday.
Weak domestic steel demand has made mills shifted their focus on exports. Most buyers stayed away from bookings as they expect prices to slump amid weak global cues. Ferrous scrap prices could decline by another $5-10/mt as buyers have remained silent for almost a week.
Sellers were unwilling to negotiate at present bid levels, almost $40-50 below their asking prices. Demand is expected to recover in the next couple of weeks. There was unconfirmed news about taxes on Chinese exports, which could boost Asian steel prices.
Heavy rains in most major steel-producing states and rising COVID-19 cases in Maharashtra, Gujarat, and South India also kept sentiment bearish.
The daily Davis Index for containerized shredded on Monday, settled at $536.25/mt cfr Nhava Sheva, down $0.75/mt from Friday. In the absence of importers from Turkey, Pakistan, Bangladesh, and Indonesia due to Eid holidays, Indian mills are likely to get a price advantage and could resume trades for imported shredded. Traders kept expectations around $540/mt cfr Nhava Sheva.
The daily Davis Index for UAE-origin HMS 1&2 (80:20) declined by $3/mt to $475/mt cfr Nhava Sheva. There was a lack of fresh offers in the Indian market. The daily Davis Index for US-origin HMS 1&2 (80:20) declined $2.5/mt to $485/mt cfr Nhava Sheva. Tightening domestic scrap supply and limited ferrous scrap inventories are likely to push trades soon.
In the Alang shipbreaking market, melting scrap on Monday traded at Rs34,900/mt ex-yards, up by Rs300/mt from Saturday and Rs900/mt from Friday. In Mumbai, rebar prices remained at Rs47,500/mt ex-works as heavy rains slowed down trades. In Mandi Gobindgarh, ingot prices were at Rs44,000/mt ex-works. Should steel prices remain supported, the appetite for ferrous scrap could increase.
Last week, active bookings for imported billets in China boosted sentiment in India. Indian mills targeted $625-630/mt fob levels for billet exports. But demand and prices in other Asian billet buyer countries, except China, were under pressure amid COVID-19 restrictions and slow steel demand.
International iron ore Fe 62pc were at $221.3/mt cfr North China on Friday closing.
On Monday, Chinese steel futures for rebar and HRC maintained an uptrend.
Domestic billet prices maintained an uptrend, rising CNY20/mt from Friday to CNY5,180/mt ex-Tangshan inclusive of VAT. Lifted flat steel demand pushed HRC futures to reach CNY6,000/mt. In the export market, mills targeted $1,000/mt fob for HRC.
The daily Davis Index for containerized shredded on Monday, settled at $540.41/mt cfr Indian subcontinent, down by $1.28/mt; while the Davis Index for containerized US-origin HMS 1&2 (80:20) settled at $499.25/mt cfr Indian subcontinent, down by $2.38/mt. International freight rates were flat from the prior week. A shortage of containers continued in the global market. Normalized container freight was around $84.04/mt, $52.17/mt, and $47.44/mt on the New York to Bangladesh, Pakistan, and India routes, respectively, as per data maintained by Davis Index.