Imported scrap prices in India have surged during the past week, hitting an all-time peak, reacting to a further supply-side crunch, high volatility and unregulated premiums charged in the local market, sources told SteelOrbis on Wednesday, November 25.
The sources said that, with the ferrous scrap price increase unabated in most originating markets and high trading activity in bellwether markets like Turkey, imported scrap prices in India have surged $15/mt on average from last week for shredded containerized scrap to $350-360/mt CFR Nhava Sheva port in the west.
Local scrap prices have also surged, gaining INR 1,600/mt ($22/mt) to INR 30,000/mt ($405/mt) at Mandi Govindgarh in the north. The price was up by INR 1,000/mt ($13/mt) to INR 26,800/mt ($362/mt) at Alang in the west.
But several traders and buyers have claimed that the local market is passing through very high volatility and arbitrarily high premiums being charged rendered officially quoted prices irrelevant in terms of making bookings by buyers. “Huge fluctuations are being witnessed in the local scrap market over the past 15 days. It is impossible to absorb such high prices and dealers and middlemen are charging arbitrary premium in view of high import prices and low availability in the local market,” said an official at the Chamber of Industrial and Commercial Undertakings, a representative body of industries in and around Mandi Govindgarh, Punjab in the north.
Another Punjab-based secondary steel mill operator said, “Scrap dealers are charging premiums ranging at INR 5,000-7,000/mt ($67-94/mt) which is completely illogical. Price fixing is completely in the hands of speculators and end-use industries are in no position to restock raw materials at such price levels, forcing several mills to either reduce capacities utilizations and even some to close down their mills.” “Local scrap prices are changing every hour. Users are at the mercy of speculators. Buyers have no choice, either book at a higher price or go without raw material input,” he added.
As for imported scrap, only large western and central Indian secondary steel mills were able to conclude trades at the current high levels, traders and market sources said.
A Gujarat-based steel mill cum trading firm reported a trade for ex-US containerized scrap for February delivery of 25,000 mt at a price of around $353-355/mt CFR Nhava Sheva.
Another western India-based secondary mill reported a deal for bulk ex-US HMS I/II scrap of 30,000 mt at a price of $330-340/mt CFR Kandla port in the west compared to similar material being traded at a price of $320/mt CFR in the earlier week.
SteelOrbis has learned that some deals for ex-UK shredded scrap showed sharp volatility in prices through the past week. It was reported that, while a deal by a local trading firm was concluded early in the week at a price of around $350/mt CFR, a contract was concluded at a higher level of $360/mt CFR towards the close of the past week.