Import scrap prices in India regain pre-pandemic levels, further rise anticipated

Wednesday, 12 August 2020 16:50:33 (GMT+3)   |   Kolkata
       

India’s imported containerized shredded scrap prices have surged during the past week breaching the $300/mt CFR mark, recovering to pre-pandemic levels, but the limited trades have been largely confined to restocking by market intermediaries in anticipation of a further increase in September prices, sources said on Wednesday, August 12.

Market sources said that deals, largely by traders, for ex-US containerized shredded scrap were reported in the market in the range of $300-305/mt CFR Nhava Seva port in the west compared to $285-295/mt CFR in the earlier week.

Sources said that a Gujarat-based secondary steel mill-cum-trading firm concluded a deal for an estimated volume of 30,000 mt of ex-US containerized shredded scrap, reportedly for local trading purposes rather than for its own consumption at around $302/mt CFR Nhava Seva.

A trader based in Raipur in the central region concluded an October delivery booking for ex-US shredded scrap for an estimated tonnage of 25,000 mt at around $300/mt CFR, the sources said.

However, the sources said that one deal for ex-UK containerized shredded scrap has been reported in the market by a local trader at the slightly lower price of around $295-298/mt Nhava Seva during the past week. Nevertheless, some sources said that it is possible that this deal was done earlier.

According to traders, the sharp rise in imported scrap prices saw local secondary steel mills becoming cautious and staying away from concluding contracts as reports indicated that they did not have sufficient liquidity strength to conclude deals at current high prices of scrap and given the weak rebar prices in the local market.

With imported scrap prices recovering to the pre-pandemic lockdown levels prevailing in early March, local traders have been the only participants in import trades, expecting the current bullish trend in prices to be sustained through September in view of strong bookings for US cargoes and hence they have been restocking at current prices, the traders said.

 “Secondary steel producers are largely absent from import trades as they do not have liquidity strength for deals at the current high prices. Only traders with strong access to bank funding are restocking, anticipating the price rise to be sustained through September,” a member of the Metal Recycling Association of India (MRAI) said.

The rise in import prices has been reflected in the local scrap market which has reversed the downtrend of the past several weeks. Sources said that scrap prices gained INR 1,000/mt ($13/mt) to INR 22,600/mt ($302/mt) ex-stockyard at Mandi Govindgarh in the north. Scrap prices recovered by INR 500/mt ($6.50/mt) to INR 21,200/mt ($283/mt) ex-stockyard at Alang in the west.

$1 = INR 74.80


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