Import scrap prices in India have weakened over the past week, while trading activity has come to a standstill amid weak finished steel prices, the further depreciation of the local currency, and the softening of local scrap and sponge iron prices, which offer alternative options for the limited demand coming from secondary mills, SteelOrbis learned from trade and industry circles on Wednesday, May 13.
Sources said that the lack of trade activity has prompted many sellers to retreat from the market, as reflected in the fact that no offers for ex-UK/Europe containerized shredded scrap have been reported during the past week. But some other origins like Australia are still present in the market with shredded offers at $390-395/mt CFR. Also, the tradable level amid the current conditions has been assessed by importers as not being above $390/mt CFR, versus $400/mt CFR in previous weeks.
Ex-Europe HMS I/II scrap offers are at around $370-375/mt CFR Nhava Sheva port in the west, but without any takers. Ex-Australia HMS I/II offers are in the range of $370-372/mt CFR Chennai port in the south, down from $375-380/mt CFR a week ago, but no deals have been confirmed, the sources said. The lowest that can be achieved in negotiations for this grade is $360-365/mt CFR from Africa.
The sources said that local bulk scrap prices have slumped by INR 1,200/mt ($13/mt) over the past week to INR 35,600/mt ($372/mt) ex-Mandi Govindgarh in the north, while sponge iron prices are down by INR 400-800/mt ($4-8/mt) to INR 25,400-26,000/mt ($265-271/mt) across various regional markets.
Raw material demand from secondary mills has been declining, with mills lowering output levels amid rising inventories, while falling prices of local scrap and sponge iron have offered better alternatives over imports.
At the same time, the Indian rupee breaking INR 95 to the US dollar over the past week, another historical low, has increased the landed cost of imports along with the commensurate rise in risks of currency exchange rates and costs of hedging, the sources added.
