Shipbreaking scrap prices declined on Tuesday amid low demand from rolling mills in Gujarat and in the North. Demand from end-users remained muted due to lockdown restrictions. Mills opted to procure only on a need basis.
The daily Davis Index for HMS attachments and Melting declined by Rs500/mt ($6.86/mt) each to Rs38,500/mt and Rs37,500/mt ex-Alang, respectively.
Mills in Gujarat and Mandi Gobindgarh are operating at lower capacities amid a dearth of oxygen cylinders. Several mills have pledged their oxygen supply towards medical needs.
Shipbreakers reduced their offers for ship plates to attract bids and the Davis Index for 1kg plates slipped by Rs500/mt to Rs38,700/mt ex-Alang and the index for 5kg plates fell by Rs300/mt to Rs40,000/mt ex-Alang in a bearish market.
Re-rolling scrap prices also followed the downward trend and the index for 6Ani declined by Rs300/mt to Rs40,000/mt ex-Alang.
Subdued domestic demand for billet has resulted in mills to focus on exports for a few months. But bids from China have declined dampening interest in that export market.
Market participants expect domestic ferrous scrap prices to remain under pressure and a reversal is likely only when the lockdown is eased and consuming sectors return to normalcy.