Import scrap prices in India have hardened over the past week due to the tightening in global supplies and, even though they are expected to continue their uptrend, local trade activity has been restricted by risks of depreciation of the local currency. The outlook remains positive on the back of the rebound in the construction grade steel markets, SteelOrbis learned from trade and industry circles on Wednesday, August 23.
The reference price for imported shredded scrap in India has increased to $432-437/mt CFR this week, up by $7-11/mt over the past week. A deal for 1,000 mt of shredded was done at $432/mt CFR late last week, while after that 1,500 mt of ex-UK containerized shredded scrap was sold at $435/mt CFR Nhava Sheva port, higher than trades at around $425-426/mt CFR a week ago. Another tonnage of 5,000 mt of ex-US shredded scrap was booked at $437/mt CFR, according to sources.
A cargo of 3,000 mt of ex-UK HMS (80:20) scrap was booked at $410/mt CFR Chennai port in the south, compared to the tradable level of around $405/mt CFR a week ago.
At least two traders said that there was a general opinion that shredded scrap prices would continue to rise and touch the $440-450/mt CFR mark riding on the back of slight improvements in demand in Asian regions and rapid bookings reported in the west.
However, various market participants acknowledged that local trade activity is poised to improve over the coming weeks in reaction to positive trends in the construction grade finished steel market both in terms of demand and prices.
But for trade activity to improve, buyers would first need to overcome nervousness over the local currency depreciating rapidly and plunging to a historical low of INR 83.10 to the US dollar. Smaller importers would still be cautious as regards concluding deals as they have limited access to currency hedging tools and import financing from lending institutions.