Import scrap prices in India have tumbled during the past week, losing $40-45/mt as the much-awaited correction hit the market, but buyers still held back from concluding contracts, perceiving that the market was yet to hit a bottom, sources told SteelOrbis on Wednesday, January 27.
The market sources said that prices reacted downwards amid a significant surge in ex-US volumes on offer and this triggered a much-awaited correction in the market as import scrap prices had been rising too fast over a prolonged period and were not commensurate to the demand dynamics.
Sources said that import scrap prices have fallen to $420-430/mt CFR Nhava Sheva port in the west for ex-US containerized shredded scrap, compared to $465-470/mt CFR a week ago.
“Buyers are yet to re-enter the market despite prices dipping as a bottom is expected at a sub-$400/mt CFR mark. The softening of local rebar prices and the liquidity constraints of secondary steel mills were also holding back any immediate rush to restock,” a member of the Metal Recycling Association of India (MRAI) said.
“Finished steel prices in China and India are showing signs of losing momentum. It is still too early to predict a correction in finished steel markets. But it will surely impose caution in restocking raw materials and can exert further pressures on imported scrap prices. With the Chinese New Year approaching, activity in the global scrap trade will dip, accentuating the correction,” he added.
Market sources said that a Gujarat-based secondary steel mill cum trading firm has reported a trade of containerized ex-US shredded scrap at a price of around $420-425/mt CFR Nhava Sheva. A Mumbai-based steel trading firm has reported another trade at $420/mt CFR, sources said.
However, in the local market, scrap prices have remained stable, though speculative premiums have vanished. Traders said that prices did not react to the slump in imports largely owing to a time lag and local scrap prices are expected to soften over the next few days as local traders become reconciled to lower import prices.
Sources said that scrap prices have remained unchanged at INR 38,000/mt ($521/mt) ex-stockyard at Mandi Govindgarh in the north and have remained at INR 32,500/mt ($445/mt) at Alang in the west.
$1 = INR 73.00