Demand for imported ferrous scrap in India remained suspended with all major states imposing lockdowns and restrictions to curb the spread of COVID-19 infections. This could result in an overall slowdown in economic activities.
Buyers decided to stay in wait and watch mode to gain clarity on the domestic situation. This week has a couple of local holidays which could further slow down trades. Steel mills, however, are keen to announce another round of price hike in line with higher international steel prices. A rise in domestic steel prices could support demand for ferrous scrap.
The daily Davis Index for UAE-origin HMS 1&2 (80:20), Monday, settled at $426/cfr Nhava Sheva, down $2/mt from Friday. Most mills either placed very low bids or refuse to book material. Traders and buyers are hassled with having to find empty containers, thereby, limiting trades.
Dubai-origin HMS #1 offered at $435-440/mt cfr Nhava Sheva. All three subcontinental markets competed to secure material from the region where supply is known to tighten during Ramadan.
The daily Davis Index for containerized shredded, Monday, settled at $460.75/mt cfr Nhava Sheva, up $0.75/mt from Friday. Offers for shredded in containers from the UK remained at $460-465/mt cfr Nhava Sheva, however, a few sellers may offer material at lower prices to encourage trades. Mills are quiet in expectation of a slight drop in prices, this week.
The index for US-origin HMS 1&2 (80:20) Monday rose by $2.5/mt to $432.55/mt cfr Nhava Sheva from Friday, while trades were suspended for long deliveries. US suppliers preferred Taiwanese and Vietnamese destinations over South Asian buyers.
On Monday, melting scrap offers in Alang rose by Rs500/mt to around Rs33,000/mt ex-yard. In Gujarat, a leading ferrous scrap consumer Mono Steel has announced a maintenance shutdown for 7 days.
The Indian customs department has announced an official holiday on April 14, thereby reducing working hours this week.
Despite the vaccination drive gaining pace, restrictions are expected to tighten in the coming days. The spread of COVID-19 in many industrial regions have forced workers to return to their hometowns. Recyclers are challenged with the limited availability of industrial oxygen cylinders used for cutting operations. The government has diverted over 80pc of oxygen supplies to medical users. Some furnace operators have also shut operations due to the unavailability of oxygen cylinders.
In China, government officials have raised concerns about the rising price of bulk commodities and are mulling ways to control prices. Domestic billet prices in the retail market dropped sharply on Monday amid a slide in steel futures. Billet prices were at CNY4,890/mt ex Tangshan, down by CNY170/mt.
The daily Davis Index for containerized shredded Monday settled at $456.82/mt cfr Indian subcontinent, up $5.18/mt from Friday. The daily index for containerized US-origin HMS 1&2 (80:20) settled at $431.09/mt cfr Indian subcontinent, up by $6.70/mt from Friday.
Weekly containerized freight rates maintained by Davis Index showed a dip of $5-10/mt to $54.61/mt, $65.09/mt, and $81.83/mt from New York to India, Pakistan, and Bangladesh, respectively.