Import scrap prices in India have edged up over the past week, reflecting volatile freight charges and uncertain delivery timelines, while trade activity has lapsed into silence amid the rapidly depreciating local currency and subdued demand as secondary mills face energy shortages, SteelOrbis learned from trade and industry circles on Wednesday, March 25.
Sources said that local scrap supplies are also tightening as ship-breaking and cutting operations have been seriously hampered by the shortage of natural gas. But, despite this, secondary mills have been showing no interest in increasing raw material restocking as risks of imports far outweigh operational requirements at a time when the energy crisis has made maintaining current levels of output unviable.
The sources said that ex-UK/Europe containerized shredded scrap quotes range at $385-390/mt CFR Nhava Sheva port in the west, reflecting continued volatility in freight rates, compared to $380-385/mt CFR a week ago.
Ex-Europe HMS I/II offers are reported at $370-375/mt CFR, compared to $365-370/mt CFR a week ago.
However, no deals have been confirmed, with sources claiming that the rapidly depreciating Indian rupee against the dollar, which has touched yet another historical low against the dollar at INR 93.45, has further increased the landed price of imports.
“There is no reason for any buyer to get exposed to high prices, risks in global trade and volatile exchange rates at a time when mills’ operation levels are themselves uncertain in the face of the energy crisis and as demand for finished steel weakens. The pption of passing on higher input costs to consumers is also getting squeezed by the expected demand depression,” a Mumbai-based ferrous and non-ferrous scrap trader said.
“We hear from some sellers that the next target price is around $400/mt CFR if the war in the Middle East is prolonged. These levels are completely unviable for any local secondary mill operations,” he added.