Imported scrap prices in India have surged during the past week in reaction to the ban on scrap exports from the UAE with the secondary steel sector further cutting down on trades to assess the situation stemming from the ban and from the continuation of the national lockdown and uncertainties at ports, SteelOrbis has learned on Wednesday, May 20.
The secondary steel mills are uncertain about the demand situation in the wake of the extension of the national lockdown until May 31, while seamless supply chains are still not working, a backlog of scrap consignments is still stuck at ports and importers have to make a fresh assessment of how the market will move in response to the ban on ex-UAE scrap, which accounted for over 20 percent of all scrap imports by secondary steel mills, the traders said.
At least two contracts concluded by secondary steel mills in western India were cancelled during the past week although sources said that this was not related to the four-month ban imposed by the UAE but to the failure of importers to get containers released from ports against deliveries completed last month.
The sources said that there have not been inquiries for imported scrap nor any significant scrap contracts concluded during the past week, as ex-US scrap offers have almost come to a halt as neither suppliers nor shipping lines from the US East Coast to Indian ports have been accepting tonnages for the past several weeks.
According to sources, the tightening of supplies has resulted in ex-UK shredded scrap offer prices surging to $280-290/mt CFR Nhava Seva port in the west with reports of suppliers willing to divert containers to Indian ports, but no buyers have been willing to conclude raw material contracts amid uncertain finished steel demand in the local market. Last week, offers for ex-UAE scrap were at $255-260/mt CFR and from the EU were at $260-265/mt CFR.
The tight import supplies and higher prices did not offer any support to scrap prices in the local market, which have continued to slide indicating a lack of any appetite for raw material restocking among secondary steel mills.
Market sources said that scrap prices are down INR 300/mt ($4/mt) to INR 21,500/mt ($284/mt) ex-stockyard at Mandi Govindgarh in northern India, while prices are down INR 200/mt ($3/mt) to INR 20,200/mt ($267/mt) ex-stockyard at Alang in the west.
$1 = INR 75.60