Indian imported ferrous scrap demand is improving amid a sharp rise in domestic ferrous scrap and sponge iron prices. Many induction furnaces paused trades amid unviable imported scrap prices. Indian buyers opted for lower-priced scrap grades or domestic alternatives instead of shredded. With depleting scrap inventories at mills, trades for imported scrap are likely to resume in India.
To encourage buying, a few traders from the Middle East offered HMS at levels lower-than-expected in the absence of suppliers from the US, Europe and Australia, on Tuesday. The daily Davis Index for containerized shredded Tuesday settled at $460/mt cfr Nhava Sheva, unchanged from Monday in absence of major trades. Most suppliers are away for the winter break. Few offers for shredded from the US and Europe/UK rose above $470-475/mt cfr Nhava Sheva. There is also a possibility of higher freight rates in the coming days.
HMS scrap under pressure
The gap between shredded and HMS has widened to $30-35/mt prompting most Indian buyers to switch to lower-priced HMS or Turning scrap. The Davis Index for UAE-origin HMS 1&2 (80:20) Tuesday settled flat at $444/mt cfr Nhava Sheva. Dubai-based suppliers offered #1 HMS at $440-450/mt cfr Nhava Sheva, but buyers bid $430-430/mt cfr Nhava Sheva on Tuesday. A few traders lowered offers for HMS 1&2 (80:20) to $425-435/mt cfr Nhava Sheva while others focused on the domestic UAE market where rebar demand remains strong.
The daily Davis Index for US-origin HMS 1&2 (80:20) settled at $447/mt cfr Nhava Sheva, up by $1.64/mt following global trends. Bids for the grade lag at $420-430/mt cfr Nhava Sheva. The absence of new offers and indications of a stronger domestic market in January aided prices. Buyers have turned silent and postponed restocking amid firm offers.
In the domestic market in Mandi, billet prices on Tuesday rose to Rs40,000-40,200/mt ($544/mt) ex-works, while ingot traded at Rs40,400/mt ($551/mt) ex-works with a possibility of a hike in the next few days. HMS 1&2 (80:20) prices on Tuesday reported a rise by Rs300/mt to Rs30,300/mt ($410/mt) delivered consumer Mumbai.
In Turkey, bulk HMS 1&2 (80:20) offers remained in the range $475-480/mt cfr Turkey. However, a few Turkish mills lowered domestic scrap purchase prices by TRY25-55/mt ($4-8/mt) amid the appreciation of local currency lira. Sentiments are mixed as participants are likely to be wait-and-watch till suppliers return to the market.
Indian billet producers resumed exports late last week. Mills continue to target above $585-595/mt fob India for billet exports. However, despite offers of $610-615/mt cfr Southeast Asia, buyers stepped back amid indications of lower prices in the Chinese market. In China, prices for Q235 150mm square billets, Tuesday, fell by CNY30/mt to CNY3,730/mt ex-works Tangshan including the 13pc VAT from a day prior. HRC export offers fell by $5-10/mt amid weak futures market.
The Davis Index for containerized shredded, Tuesday, settled at $460.69/mt cfr India subcontinent, up by $0.89/mt from Monday. The Davis Index for containerized US-origin HMS 1&2 (80:20) rose to $447.44/mt cfr India subcontinent, up by $2.22/mt from Monday. International containerized freight prices continued to trend up amid a shortage of containers in Asia.