Indian buyers continued to adopt a wait-and-watch approach on Monday since the global price direction remains unclear. Shredded bookings have paused since finished steel sales are yet to pick up. Leading steelmakers, however, increased HRC and wire rod prices amid expectations of end-user demand picking up in the auto sector in the coming days. Still, high-grade scrap remains unviable for many.
The Davis Index for containerized shredded settled at $303.75/mt cfr Nhava Sheva, down by $2/mt from Thursday. Bids for shredded have dropped by $7-10/mt from mid-September amid limited trades. There were a few offers of $305-307/mt cfr Nhava Sheva on Monday with no trading at those prices since buyers are unwilling to raise bids above $300/mt cfr Nhava Sheva. Prices have dropped to a two-month low.
The Davis Index for HMS 1&2 (80:20) of UAE-origin, Monday, was at $283/mt cfr Nhava Sheva, down by $1/mt from Thursday. Deals for Dubai-origin HMS 1&2 (80:20) were at $282-284/mt cfr Nhava Sheva with some bids even heard at $275-280/mt cfr Nhava Sheva. A few traders offered containers of #1 HMS from Dubai at $285-287/mt cfr Nhava Sheva.
In the bulk market, no trade for US-origin HMS 1&2 (80:20) materialized with buyers restraining their bids in the range of $295-300/mt cfr Kandla against offers of $310/mt cfr Kandla. Domestic scrap availability has improved with activities gradually returning to pre-COVID-19 levels.
The index for US-origin HMS 1&2 (80:20) settled at $284.09/mt cfr Nhava Sheva, down by $1.62/mt from the prior Thursday. Trades for the US and UK/EU-origin HMS 1&2 (80:20) were at $283-285/mt cfr Nhava Sheva. Most suppliers believe price decline could remain limited with the market receiving support from demand recovery in October. Offers for HMS1&2 (80:20) from Europe, South America, and West Africa were unchanged at $280/mt cfr Nhava Sheva against bids of $270-275/mt cfr Nhava Sheva.
Will the finished steel price hike sustain?
In the domestic market, major steelmakers raised billet prices by Rs500-700/mt and finished long steel prices by Rs1,500-2,000/mt. However, most market participants are unsure of the price hike being accepted by end-users with demand still subdued.
The spread between imported scrap and rebar in Mumbai widened to Rs12,700/mt ($173.02/mt) on September 30 from Rs11,700/mt ($159.03/mt) in end of August.
Uncertainty in global markets due to China slowing trading ahead of the Golden Week holidays and a second wave of COVID-19 in the UK and other European countries could dampen sentiment. Imported scrap prices could also fall in the coming days.
In the billet export market, activity has paused completely amid Golden Week Holidays. Weak domestic sentiment kept billet importers in SE Asia in a wait-and-watch mode.
The Davis Index for containerized shredded, Monday, settled at $297.90/mt cfr India subcontinent, down $2.24/mt from Thursday, but down by $4/mt from Monday last week. The Davis Index for containerized US-origin HMS 1&2 (80:20) settled at $277.48/mt cfr India subcontinental, down $1.91/mt from the prior week.