Import scrap prices in India have been fluctuating in a limited range in the past week amid quiet conditions with very few sellers active in submitting offers, while the continued depreciation of the local currency has made trade unviable for buyers, SteelOrbis learned from trade and industry circles on Wednesday, May 20.
Sources said that ex-UK/Europe containerized shredded scrap prices are quoted largely at unchanged levels, and the minimum level for this origin is $400/mt CFR, but some other suppliers may discuss $390-395/mt CFR, making prices unchanged compared to last week. “Sellers would target $410/mt, $415/mt and $420/mt CFR, but it makes no sense for India with such a sharp rupee depreciation,” a trader said. Prices of HMS I/II have been heard at $350-367/mt CFR for different origins.
According to the sources, the further depreciation of the Indian rupee against the US dollar hitting a new historically weak level again at INR 96.14 has significantly increased the landed price of imports. Secondary mills facing pressures on margins from falling finished steel prices are not in a position to absorb higher-priced raw materials.
Furthermore, demand for raw material is also expected to soften with the government pushing for a reduction in energy consumption, and secondary mills already facing inventory rises have been considering lowering plant capacity utilization levels, the sources added.
It was pointed out that local bulk scrap has continued to soften, providing a better option than imports to meet the limited demand from secondary mills. The bulk scrap price has lost INR 500/mt ($5/mt) to INR 35,100/mt ($363/mt) ex-Mandi Govindgarh in the north.
“Risks of imports are rising with the continued slide of the Indian rupee against the US dollar. Mills have no confidence in concluding high-cost imports at a time when not only finished steel margins are under pressure but rising inventory makes cutbacks in production imminent,” a Mumbai-based ferrous and non-ferrous trader said.
