Ex-US scrap deals to India look limited in the short-term due to low bids and a tight scrap supply. Despite recent demonetization policy changes in India that abolished the use of some small bank notes resulting in domestic money shortages which are affecting the Indian economy, some Indian buyers are showing interest for US origin shredded scrap containers for import. A few buyers have shown interest in containerized scrap at $260-265/mt CFR, a range that is considered exceptionally low for US traders.
Ex-US containerized shredded scrap offers this week are being heard at $275-280/mt CFR. According to an East coast source close to SteelOrbis, “Supply in the US is too tight for the offers that we are hearing from Indian scrap buyers. Some US mills are already talking with yards for December buys, and shredded and heavy melt inventories are not flowing into the yards as fast as expected. Offers for shredded would need to be closer to $280/mt CFR for the deals to make sense. They may have the ability to increase bids but this past week had many market uncertainties which make buyers try lower bids.”
According to a separate source, “The UK prices are slightly more attractive than the East coast US, but given the overall raw steel market up trend, the offers from Indian buyers will probably need to move up to obtain shredded scrap from any market.” UK shredded material to India is being heard offered at $270-280/mt CFR Nhava Sheva.
Due to the tight supply in the East coast, they may move bids to the West coast. Indian buyers have been known to also purchase scrap from the West coast but additional costs from freight, loading and container weight limitations have resulted in the preference for East coast exporters.