Imported scrap prices in India have continued to rise through the past week in view of the shortage of material in exporting countries, buyers in key overseas markets settling for higher-volume bookings at higher prices and - even though the number of trades in the local Indian market has remained negligible owing to the festival holidays - secondary steel mills are expected to resume import bookings in view of stiff challenges in local sourcing, sources told SteelOrbis on Wednesday, November 18.
They said that the strengthening of billet prices in markets across India, China, and Southeast Asia has been fueling rising scrap prices supported by steel mills in key benchmark-setting markets like Turkey deciding to make bookings at higher prices.
Market sources said that ex-US containerized shredded scrap prices have increased to $340/mt CFR Nhava Sheva port in the west, compared to deals concluded at levels of $334-338/mt CFR in the earlier week.
“The key drivers of scrap prices are all performing very strongly. The farmers’ protests in the northern state of Punjab and the suspension of freight trains in the region have also led to challenges in local sourcing for secondary steel producers,” an official at the Metal Recycling Association of India (MRAI) said.
“Over the past week, the higher scrap prices did not impact the market much as most market participants were away on holidays and the markets closed for the festivals. But I anticipate secondary steel mills will be back in the market and compelled to make fresh bookings to restock raw materials even at higher levels as any correction in scrap prices is not seen in view of the strong prices of finished and semis, coupled with problems of local sourcing,” he added.
A Maharashtra-based secondary steel mill has reported a booking for ex-US shredded scrap for February delivery at a price of $340/mt CFR Nhava Sheva port, the sources said.
Market sources said that a secondary steel mill based at Raipur in central India has reported a booking for 30,000 mt bulk ex-US HMS I/II scrap at a price of around $320/mt CFR Kandla port.
The local scrap price at Mandi Govindgarh in northern India is reported to be up by INR 500/mt ($7/mt) to INR 28,400/mt ($381/mt) ex-stockyard, but sources pointed out that the price was only notional as no trades were concluded since buyers wanted to avoid transportation challenges and high costs in sourcing from the north.
In view of difficulties in sourcing from the north, scrap prices in the west at Alang surged INR 1,000/mt ($14/mt) to around INR 25,800/mt ($346/mt) ex-stockyard, the sources added.
$1 = INR 74.50