Import scrap prices in India have tumbled during the past week as the correction in the international market gained momentum and, even though trading activity has improved slightly, most secondary mills in India have preferred to use cheaper DRI or domestic scrap, SteelOrbis has learned from trade and industry circles on Wednesday, March 24.
The source said that one of the main reasons for buying failing to revive as expected was that the sharp slump in price on FOB basis has not been reflected in a commensurate lowering of prices on CFR basis as the freight rates of shippers have been on a sharp uptrend.
Uncertainties in the rebar market triggered by the second wave of the pandemic have also made secondary steel mills take a cautious outlook, reflected in their lower bookings of raw materials, considering that the demand situation is very fickle, traders said.
Ex-US containerized shredded scrap sales prices have come down to $420-430/mt CFR Nhava Sheva port in the west, with the midpoint at $425/mt CFR, down by $15-20/mt from last week.
A deal for ex-UK containerized shredded scrap has been reported in the market at $425/mt CFR Nhava Sheva, while just two weeks ago the suppliers’ asking price was $470/mt CFR.
“Our estimates indicate that the current CFR landed price at Indian ports is at least 4-7 percent higher, only because of higher freight rates being charged by shippers over the past week. Buyers in key markets like China, India and Pakistan are unwilling to accept CFR prices owing to higher freight rates,” a member of the Metal Recycling Association of India (MRAI) said.
“The landed price at around $410-415/mt CFR for ex-US material would be more acceptable to buyers. So either freight rates stabilize or the scrap market correction gains further momentum if import trade activity is to revive significantly. Until then, secondary mills will keep relying on cheaper local scrap and DRI,” he added.
Sources said that a Maharashtra-based secondary steel mill has reported a trade of ex-US shredded scrap at $425/mt CFR Nhava Sheva. A Gujarat-based secondary steel mill cum trading firm has concluded a trade for shredded scrap at a price of around $425-430/mt CFR Kandla port in the west.
Higher arrivals of vessels for breakage at Indian scrap yards and the projected rise in scrap output at shipbreaking yards backed by the easing of logistical issues for supplies from northern scrap markets have continued to put pressure on local scrap prices.
At Mandi Govindgarh in the north, scrap prices have moved down INR 1,000/mt ($14/mt) to INR 38,000/mt ($525/mt) ex-stockyard, while at Alang in the west they have lost INR 1,500/mt ($21/mt) to INR 31,250/mt ($432/mt) ex-stockyard.
$1 = INR 72.40