Import scrap prices in India have remained relatively stable over the past week, but trade activity has fallen silent with the local currency hitting historical lows against the dollar and heavy flooding and monsoon rains are continuing much longer than usual, forcing secondary mills to reassess the demand outlook for long products, SteelOrbis learned from trade and industry circles on Wednesday, September 3.
Sources said that ex-UK/Europe shredded scrap offer prices have been reported in the range of $360-365/mt CFR with most offers at the lower end of the range, but they have still failed to attract any trade as buyers have lacked confidence in emerging market conditions following the currency depreciation and the demand depression due to rains.
The price level of ex-UK HMS I/II (80:20) scrap is reported $5/mt lower at $325-330/mt CFR, but has still failed to trigger any buying activity, the sources said.
The sources said that, with the Indian rupee touching several historical lows of INR 88.10, INR 88.30 and INR 88.50 to the US dollar over three consecutive days, importers have become very nervous as such currency volatility not only increases the landed cost of material but also increases currency hedging and insurance costs, making imported raw material unviable.
“Since globally there is market stability, most sellers are not willing to adjust offers in the sub-continent to the demand weakness in the region. In the user segment, there is serious concern emerging over the demand revival for construction grade finished steel products, prompting induction furnace operators to be cautious on raw material restocking,” a Mumbai-based ferrous and non-ferrous trader said.
“Also, the current rapidly depreciating local currency rules out extending commitments on increasing import exposures,” he added.