Imported scrap prices in India have continued to seek lower levels during the past week and trading activity has improved, but secondary steel mills are still seen to be holding back from entering the market aggressively, assessing the impact of the national budget on Monday, which proposed the reduction of the import duty for ferrous scrap from 2.5 percent to nil, sources told SteelOrbis on Wednesday, February 3.
Market sources said that trades during the past week have been reported in the range of $408-412/mt CFR Nhava Sheva port in the west for ex-US containerized shredded scrap, with only one stray deal at a slightly higher level of $415/mt CFR, compared to $420-430/mt CFR last week. But most of these deals were before the nil rate of import duty was announced in the budget on February 1.
“The reduction of scrap import duty from 2.5 percent to nil came into effect from February 2, 2021. Importers and secondary steel mills are still assessing its impact on the landed price based on current offer levels,” a member of the Metal Recycling Association of India (MRAI) said.
“International scrap prices are softening steadily. Buying in bellwether markets like Turkey is slowing down. This has the potential of driving offers below $400/mt CFR in the near term and nil import duty will enable secondary steel mills to access cheaper raw material, and we are expecting a rise in trading activity soon as buyers finish their new restocking strategies,” he added.
Sources said that a Gujarat-based secondary steel mill cum trading firm reported a trade of last week for around 20,000 mt of ex-UK containerized shredded scrap at a price of around $415/mt CFR for April delivery.
A Maharashtra-based secondary steel mill concluded a trade at a price of around $408-410/mt CFR Nhava Sheva. A secondary mill located at Raipur in central India reported a trade of ex-US shredded scrap at around $410-412/mt CFR, the sources said.
Local scrap prices, however, have been maintained unchanged, though traders said that prices would tend to react to cheaper imports after a lag period. At Mandi Govindgarh in the north the scrap price has remained unchanged at INR 38,000/mt ($521/mt) ex-stockyard, while it has remained at INR 32,500/mt ($445/mt) at Alang in the west, with at least two northern India-based traders saying that speculative premiums have been completely withdrawn and local scrap prices face a downside potential of INR 1,000-2,000/mt ($14-28/mt) amid cheaper imports.
$1 = INR 73.00