Import scrap prices in India have firmed up over the past week with sellers citing tighter supplies, but buyers have remained on the sidelines, refraining from concluding any deals amid logistical and shipping uncertainties, together with rising war risk premiums following the US-Israel attack on Iran, SteelOrbis learned from trade and industry circles on Wednesday, March 4.
Ex-UK/Europe containerized shredded scrap offer prices are quoted in the range of $378-380/mt CFR Nhava Sheva port in the west, compared to $375-378/mt CFR a week earlier. Some other origins like Australia are still quoted at $370-375/mt CFR for this grade. The shredded scrap reference price in India is up $2/mt over the past week to $370-380/mt CFR, with the midpoint at $375/mt CFR.
Ex-UK HMS I/II (80:20) is quoted at $355-360/mt CFR, against $348-350/mt CFR a week ago, while the tradable level for this grade is still not above $350/mt CFR.
Buyers have showed little interest in concluding deals amid very nervous market conditions caused by the outbreak of war in the Middle East.
It has been pointed out that deals under present conditions entail too many risks. Most Western shipping lines have halted receiving cargos that would need to pass through trade corridors in the Middle East. And with shipping lines not designating vessels, there has been no guidance available on freight rates, making the current CFR-based pricing mostly irrelevant.
Furthermore, war risk premiums charged for vessels are reported to be spiking sharply with several sources in trade circles pointing out that existing risk premiums on cargoes already booked are being cancelled and are up for re-negotiation at significantly higher levels.
Some reports in India indicate that war risk premiums averaging at around 0.2 percent of cargo value are being increased to 0.5 percent for a few stray cargoes that are being booked, sharply increasing CIF (cost, insurance, freight) levels for ports designated by buyers via Middle East trade routes.
Also, with crude oil and gas prices surging in reaction to the war, bunker costs (fees imposed on the shipper to cover cost of fuel of vessels) are also being quoted at significantly higher prices, the sources said.
They said that these numerous uncertainties and rising costs render assessments of the landed prices of imports almost impossible and make import trade extremely risky.
