Import scrap prices in India have softened during the past week, but have still failed to evoke buying interest with secondary steel mills tending to keep plant capacity utilization at low levels and hence their lower raw material requirements and uncertain rebar prices, SteelOrbis learned from trade and industry circles on Wednesday, August 4.
Containerized shredded scrap prices have edged down by $5-10/mt over the past week to $520-530/mt CFR Nhava Sheva port in the west.
But only nominal volume bookings were heard in the market as secondary steel mills have been operating at average plant utilization levels of 50-60 percent, down from the average of 70-80 percent around March and April, as mills have been unable to meet rising input costs and pass on higher production costs to consumers as rebar prices have been rising but not at a pace to offset costs.
“Unless we are sure of rebar prices consolidating at higher levels, secondary mill operators will always be at a risk of concluding imported raw material bookings with lead delivery times of at least 60 days. Projecting our raw material requirements amid uncertain plant utilization levels is a big challenge and keeping buyers away from imports,” an official from eastern India’s largest electric arc furnace operator said.
“Our assessment is that sentiments in the global scrap market are weak. There is significant downside potential and a bottom of sub-$500/mt is a possibility. Hence, buyers are waiting to see a new floor price emerge,” he added.
According to an official from a Gujarat-based secondary steel mill cum trader, Indian prices generally track the market in Turkey, where import prices are falling. With the pandemic on a fresh wave in Vietnam and China, there are doubts over the recovery of steel prices and this may trigger a deeper correction in scrap prices and local importers are unlikely to rush into the market now.
Amid the quiet market activity, a nominal tonnage deal was heard by a western India-based secondary steel mill operator for ex-US containerized shredded scrap at around $520-525/mt CFR Kandla port.