Bullish sentiment is raging unabated in India’s import scrap market, with prices surging on the back of persistent tight supplies, shipping container unavailability and uncertain delivery schedules with buyers scrambling to conclude trades facing an acute raw material sourcing crisis, SteelOrbis learned on Wednesday, December 23.
Traders and market sources said that ex-US shredded containerized scrap prices have skyrocketed to around $435-445/mt CFR Nhava Sheva port in the west, with most trades reported at the highest end of the price range, while last week the price level was $400-405/mt CFR.
Trading of ex-UK shredded scrap has remained negligible as sellers were not submitting offers in the Indian market, unable to get assurances of container availability from shippers, but sources said that a stray sole deal was concluded during the past week at a highest price of around $435-440/mt CFR, indicating the shortage of materials available for secondary steel mills.
“The scrap market is both difficult and crazy. Difficult because secondary steel mills are facing a raw material crisis both for local billet availability as well as imported scrap. Crazy as prices are skyrocketing and there is no sign of any correction that usually marks a bull run in any commodity trade cycles,” a member of the Metal Recycling Association of India (MRAI) said.
“There are so many imbalances in the market today. From the sellers’ side, volume availability is tight and they are unable to secure containers from shippers and delivery schedules have gone all haywire. On the buyers’ side, demand is at a peak in all key global markets with a lot of volumes being booked in Turkey at high prices and buyers in India and Pakistan do not have the financial strength to restock raw materials at such levels but they are desperate for raw materials at the same time, because the shortage in the local market is being aggravated every week,” he added.
With billet and rebar prices gaining ground steadily in the local market from the strong rebound in demand, secondary steel mills are losing market share vis-à-vis integrated producers in face of an input shortage build-up.
Sources said that a Maharashtra-based electric arc furnace based secondary steel mill concluded a end-of-April delivery booking for ex-US containerized shredded scrap at a price of around $440-442/mt CFR Nhava Sheva port.
A Raipur-based secondary steel mill in central India has reported a trade of shredded scrap at around $440/mt CFR for April delivery, the sources said.-
A Gujarat-based leading ferrous and non-ferrous scrap trading firm has reported a restocking deal for ex-US shredded scrap at a price of around $440-445/mt CFR.
Scrap prices have continued on a bull run in the local market with several reports indicating that, while availability has continued to be tight, even small volumes have been concluded at premiums based on volatile prices, which were changing several times even within a single trading day. Traders said that local scrap prices surged by an average of around INR 2,000/mt ($27/mt) over the past week at INR 34,000/mt ($460/mt) ex-stockyard at Mandi Govindgarh in the north, but limited trades were reported at a premium of an additional INR 1,000/mt ($13/mt). The price at Alang in the west is up INR 2,000/mt ($27/mt) to INR 30,300/mt ($410/mt) ex-stockyard.
$1 = INR 73.90