Local Indian scrap prices have resumed their downtrend largely in response to secondary steel mills sharply lowering capacity utilizations and cutting down on raw material bookings. Customers can get additional discounts for import scrap as well, but the interest in purchases is limited due to slump in the Indian currency, SteelOrbis was informed on Wednesday, September 4.
According to market sources, scrap (HMS 80:20) prices are down INR 400/mt ($6/mt) week on week to INR 23,800/mt ($329/mt) ex-stockyards in Mandi Govindgarh in northern India. Scrap prices have fallen by INR 500/mt ($7/mt) week on week to INR 23,000/mt ($318/mt) ex-stockyard at Alang in western India.
Imported prices for shredded scrap from Europe have remained unchanged during the past week at $290/mt CFR Nhava Seva port in western India, although according to a New Delhi-based trader, ex-UAE offers are slightly lower at $285/mt CFR. But with the Indian rupee plunging to a nine-month low during the past week, importers faced huge currency hedging risks and have stayed away from making bookings even at lower offers, considering the key consumers among secondary steel mills are not restocking raw materials.
According to a member of the Raipur Iron and Steel Trade Association (RISTA), electric arc furnaces in the Raipur region in central India are already facing higher energy costs of about 20 percent compared to counterparts in northern India. Under these circumstances, they are not in a position to absorb the higher landed cost in rupee terms for imported scrap and have been forced to sharply lower raw material bookings and lower plant capacity utilizations, downing furnaces during night shift operations.
$1 = INR 72.34