Ferrous scrap importers in India resumed inquiries as the cancellation of rebates on few more steel product exports from China boosted sentiment.
On Thursday, the Chinese Ministry of Finance announced the cancellation of temporary export rebate taxes on about 23 steel products including CRC (cold rolled coil) and GI (galvanised coils) effective Aug 1. The government also raised export taxes on pig iron and ferrochrome.
In the global market, flat steel prices are expected to increase due to the slowing down of exports from China. However, no change was announced for HRC exports.
Indian steelmakers catering to the export market stand to gain from this announcement. Mills who aim to increase their share in the export market could export aggressively amid low domestic demand.
Finished steel demand in India has been recovering for more than a week now. Also, the availability of domestic scrap has tightened in most central and northern regions. In South, the pace of recovery is still slow.
The daily Davis Index for containerized shredded on Thursday settled unchanged at $537.5/mt cfr Nhava Sheva. Offers for shredded from the UK/EU were stable at $540-545/mt cfr Nhava Sheva.
Following a $10/mt drop in Turkish bulk prices, market participants expected bearish trends, however, Asian containerised markets did not reflected the same sentiment. In Turkey, daily HMS 1&2 (80:20) index dropped to $474.76/mt cfr Turkey, down $4.62/mt on Wednesday.
The daily Davis Index for UAE-origin HMS 1&2 (80:20) rose by $1/mt to $474/mt cfr Nhava Sheva. Offers from UAE-based sellers remained firm. Buyers raised bids to $470-475/mt cfr Nhava Sheva following sustained recovery in demand as well as domestic steel prices. A few deals for #1 HMS reported at $480/mt cfr Nhava Sheva, while some sellers targeted above $510-515/mt cfr Chennai.
In Alang’s shipbreaking market, there were no trades amid the ongoing transporters’ strikes, which continued for the third day. In Mumbai, asking rates for rebar rose by Rs500/mt on Thursday boosted by demand recovery. The index for rebar settled at Rs49,000/mt ex-works. In Mandi Gobindgarh, ingot traded up by Rs600/mt at Rs46,100-46,300/mt ex-works.
Iron ore Fe 62pc in the spot market traded at $201.25/mt cfr North China, up $0.8/mt on Wednesday. While steel futures firmed up on Thursday, but iron ore futures were slightly down.
On Thursday, domestic billet prices in China were unchanged at CNY5,240/mt ex-Tangshan inclusive of VAT. HRC futures rebounded above CNY6,000/mt with domestic steel prices up by CNY50-100/mt on Thursday. Chinese demand for imported billets dropped this week. Offers for billets from India were still above $625-630/mt fob or $715-720/mt cfr China.
The daily Davis Index for containerized shredded settled at $542.56/mt cfr Indian subcontinent, down $1.44/mt, while the daily Davis Index for containerized US-origin HMS 1&2 (80:20) settled at $497.34/mt cfr Indian subcontinent, down by $1.61/mt.