Local Indian prices for HMS 80:20 scrap have staged a mild recovery during the past week, gaining INR 500-650/mt ($8-10/mt) on the back of reports of few ships coming in for breaking and low scrap import shipments, traders said on Wednesday, March 25.
According to a Mumbai-based trader, local scrap prices at Alang, one of the largest shipbreaking yards in western India, have increased by INR 650/mt ($10/mt) over the past week to around INR 23,350/mt ($375/mt), amid reports of fewer ships lined up over the next few months for breaking.
The recovery in the northern Indian scrap market around Mandi Govindgarh has been relatively modest, with scrap prices increasing by INR 500/mt ($8/mt) week on week to around INR 25,500/mt ($409/mt).
Traders said that scrap import offers from Europe have remained stable at around $270/mt CFR Mumbai, but no significant transaction has been reported in the market against the backdrop of weakness of the Indian rupee at INR 62.25 to a dollar.
Sources said that traders are refraining from booking imported scrap, anticipating a fall in offers as Chinese finished steel product prices have continue to soften.
However, interest in local scrap has revived marginally as product prices in the secondary steel sector have stabilized during the week after a major correction earlier in the month.
Market sources said that, despite supply side support in form of fewer ships reporting for demolition at Alang, the upside potential will be limited due to continued oversupply of pig iron, while low capacity utilization of secondary mills are expected to persist.
$1 = INR 62.29