Imported ferrous scrap demand in India remained under pressure as the number of new COVID-19 cases has refused to fall. A few trades for HMS scrap concluded at marginally lower prices. But offers for shredded, P&S and busheling grades were firm on strong global cues. Yards also cited elevated container freight charges as a reason for raising asking prices.
Market participants are wary of finished long steel demand picking up in May even if lockdown restrictions are eased and believe it could stay subdued until June. Monsoon season in early June slows the pace of construction activity. But some mills believe the government’s decision to make vaccinate all age groups could improve the situation soon and keep steel and raw material prices elevated.
Sellers kept asking prices at $455-460/mt cfr Nhava Sheva for EU/UK-origin shredded. The Davis Index for containerized shredded Thursday settled at $458.75/mt cfr Nhava Sheva, up by $1.25/mt from Wednesday. Strong global rebar and HRC prices also kept suppliers bullish. Scrap supply is tight, and most suppliers state they will be unable to ship material at least until June.
The daily Davis Index for UAE-origin HMS 1&2 (80:20) was at $425/cfr Nhava Sheva, down $1/mt. Amid a drop in domestic scrap prices, buyers resisted offers by Dubai suppliers. Trades for Dubai-origin HMS #1 at $435-440/mt cfr Nhava Sheva, prices unchanged from a day ago.
With the surge in COVID-19 cases and lockdown in most states, market participants expected bids to register a decline of $25-30/mt. But the decline in bids was far lesser amid stable demand for steel for infrastructure projects.
The index for US-origin HMS 1&2 (80:20), Thursday, settled at $430/mt cfr Nhava Sheva, down by $0.75/mt from Wednesday. Offers were at $430-435/mt cfr Nhava Sheva on limited container availability and high freight rates. Bids were at $420-425/mt cfr Nhava Sheva.
On Thursday, melting scrap offers in Alang showed an uptick of Rs300/mt to Rs35,500-35,600/mt ex-yards as demand improved. Many yards have been forced to shut operations on oxygen shortage, and recycling activity at Alang is gradually coming to a standstill. Despite lowered generation, production halts at various plants could balance the supply-demand equation, keeping prices flat or rangebound.
In Mumbai, a major scrap consumer market, rebar prices were unchanged on Thursday after falling by Rs2,000/mt in two days. Rebar traded at Rs49,300/mt ex-works Mumbai with the index for HMS 1&2 (80:20) unchanged from Wednesday at Rs31,000/mt delivered mill.
Steelmakers could focus on exports in the near term. The Maharashtra government has imposed a lockdown for fifteen days impacting inter districts transport and the availability of laborers.
In China, spot iron ore prices hit a 10-year high of $190/mt cfr North China for 62pc Fe scrap content. In the domestic market, billet traded at CNY4,940/mt ex Tangshan, unchanged from a day ago.
The daily Davis Index for containerized shredded Thursday settled at $453.31/mt cfr Indian subcontinent, up by $1.4/mt from Wednesday; while that for containerized US-origin HMS 1&2 (80:20) was at $429.19/mt cfr Indian subcontinent, up by $0.66/mt from Wednesday.