Import scrap prices in India have continued to soften over the past week, but even the lower levels have failed to trigger any trade activity, with induction furnace operators preferring local sourcing to meet the limited demand caused by lower capacity utilization, while seeking to avoid currency risks, SteelOrbis learned from trade and industry circles on Wednesday, November 19.
Sources said that ex-UK/Europe containerized shredded scrap has been quoted in the range of $350-354/mt CFR Nhava Sheva port in the west, compared to $352-355/mt CFR a week ago. But with bids reported at $340-348/mt CFR, sellers are not interested in such discounts against the backdrop of the hardening of scrap prices seen in select global markets.
Ex-UK HMS I/II (80:20) offers are reported at $310-315/mt CFR, almost the same as in the previous week, but raw material demand from the induction furnace sector is heard to be falling amid output cuts and even this lower demand is being met through local sourcing.
The sources said that, even though local scrap prices recorded gains for the second consecutive week, furnace operators have still preferred local sourcing to avoid currency risks from the depreciating rupee, while raw material procurement can also be made in relatively smaller volumes than imports, thereby conserving working capital liquidity.
Local bulk scrap prices have gained INR 500/mt ($6/mt) to INR 31,500/mt ($356/mt) ex-Mandi Govindgarh in the north, while sponge iron, another alternative, is up INR 550/mt ($7/mt) to INR 27,150/mt ($306/mt) ex-Raipur in the central regional market.
