As previously reported, Indian demand for imported scrap has been negatively affected by the demonetization policy established in early November that removed some smaller bank notes from circulation. Not only did it affect the financial liquidity of many exporters, but the negative effect on its domestic economy and, specifically, steel demand is expected to continue into first quarter 2017.
Despite the depressed demand, sources close to SteelOrbis note that several Indian steel mills have announced December price increases of $40-45/mt on finished steel flats in an attempt to pass on increases in raw material costs.
According to market sources, the few scrap import transactions recently completed by Indian buyers are running at approximately $270-275/mt CFR Nheva Sheva for containerized shredded and $230-245/mt CFR Nheva Sheva for HMS I/II 80:20 with no known transactions ex-US in the last several weeks. Last week US exporters considered Indian bids too low as they required numbers close to $280/mt given the expected tight supplies in scrap inventories for December and January. Both US and UK exporters are rumored to have already committed much of their available December scrap material.
Meeting commitments for international scrap sales already made has required US exporters to increase prices for heavy melt and shredded in the East coast at substantial premiums above November prices to domestic mills. On Friday the week ended December 2, US exporters have been heard offering a limited supply of containerized shredded at $280-285/mt CFR Nheva Sheva for January. This price reflects an increase of $5/mt compared to prices earlier in the same week and are said to be based on tight supply concerns.