Imported scrap prices in India have remained under pressure amid muted trading conditions weighed down by extreme nervousness over the sustained fall in rebar prices and the tight liquidity faced by secondary mills, SteelOrbis learned from trade and industry circles on Wednesday, May 3.
Indian secondary mills have been bidding for ex-Europe containerized shredded scrap at $428-430/mt CFR, but only small-tonnage deals and offers have been heard at around $435/mt CFR, slightly lower than trades at $438/mt CFR a week ago.
Market sources said that one deal for 2,000 mt of ex-Europe containerized shredded scrap was rumored at $430/mt CFR Nhava Sheva with the same trader also seeming to have made a booking for ex-Europe HMS (80:20) scrap at $420/mt CFR Kandla port in the west.
As a result, the SteelOrbis reference price for shredded scrap in India has come to $430-435/mt CFR, versus $438-440/mt CFR last week.
“The mood in the market is of concern to both sellers and buyers. Secondary mills are facing margin pressures and unwilling to pay higher prices and are bidding at $425-430/mt CFR [for shredded scrap]. Sellers are reluctant to go below $440/mt CFR, leading to dull stalemate trade conditions,” a Mumbai-based trader said.
“Import prices may drop further and stability is unlikely as demand and prices remain weak in the global markets. There is a lot of trade chatter about the shredded import price touching a low of $410/mt CFR in the near future. It may or may not happen, but cash-strapped buyers are willing to wait and watch until the price finds a new bottom,” he said.
According to a eastern region-based secondary mill operator, there is no urgency in importing scrap as local prices of sponge iron are also falling and are currently at a 10-12 percent discount to imported scrap, and, with rebar margins close to negative territory, mills will be averse to any high-cost input.