Import scrap prices in India have continued to go down during the week ended on September 18, with trading activity still being at higher levels, SteelOrbis has been informed.
Import prices for shredded scrap ex-UAE have declined by $5/mt over the week to around $270/mt CFR Mumbai for end-October deliveries. The sources said that offers have been reported in the market at even lower levels of around $265/mt CFR Mumbai for ex-UK scrap transshipped through the UAE.
The sources attributed the lower offer of ex-UK scrap to the weakening of the British pound against the dollar against the backdrop of Brexit and exporters from originating countries taking advantage of the weak pound to quote lower offers, the sources added. Moreover, buyers have been able to get some additional discounts of about $5/mt in deals.
According to market sources, local scrap prices in India have moved down by INR 300/mt ($4/mt) to INR 23,000/mt ($323/mt) ex-stockyard at Mandi Govindgarh in northern India. Scrap prices are down by INR 200/mt ($3/mt) to INR 22,500/mt ($316/mt) ex-stockyard at Alang in western India. “The local scrap market has come under renewed pressures from the general slide in offer levels of imported scrap. Import bookings too are seen to be rising with a greater number of secondary steel mills shifting to imported scrap,” a member of the Mumbai-based Metal Recycling Association of India (MRAI) said.
“Import volumes will only keep rising over the next few months. Local scrap traders and secondary steel mills are still a little shy of concluding bookings or increasing shipment volumes as most analysts are predicting a further fall in international scrap prices,” he said.
However, according to a New Delhi-based trader, scrap imports during the past week did not rise as much as anticipated largely because of the increasing differential between the FOB price of material and the Mumbai CFR price. He said that this was because of the spike in freight rates, particularly with the shipping lines operating through the Strait of Hormuz and Gulf of Oman having sharply increased freight rates following the rising tension in the region.
A further fall in the scrap import price could partially offset the rise in freight rates, making CFR prices more favorable for importers and causing a greater number of secondary steel mills increase their reliance on imported scrap, the trader said.
$1 = INR 71.2