Imported scrap offers for India have edged up during the past week, but deals have been concluded at lower levels amid reports of at least a few contract cancellations and buyers generally retreating from the market as more states in India have moved from restricted to complete lockdowns, SteelOrbis learned from trade and industry circles on Wednesday, April 14.
Sources said that ex-US containerized shredded scrap offers have been heard at around $455-465/mt CFR Nhava Sheva, but a few limited trades for low-volume deals have been reported at $445-450/mt CFR and one at $455/mt CFR compared to last week’s levels of $430-450/mt CFR.
Several traders and officials at secondary mills have said that there were reports of at least a few supply contracts concluded earlier being cancelled as several states like Maharashtra and Gujarat announced complete lockdowns this week.
Buyers are apprehensive that arrivals of consignments at ports during the lockdown will be stuck in logjams and that forced delays in clearing the consignments will entail payments of demurrage or higher rentals at port stockyards, pushing up costs of imported raw material.
The Indian currency weakened to a nine-month low during the past week, at INR 75.10 to the US dollar, further reining in buying sentiments.
“Higher finished steel prices following increases in base prices for long and flat products by both primary and secondary producers initially supported imported raw material restocking early in the week. But the trend was aborted by panic over the imposition of a complete lockdown in key manufacturing states,” an official of the Metal Recycling Association of India (MRAI) said.
“Production planning is a big challenge in view of too many uncertainties over the pandemic. Secondary mills are keen to restock in view of good prices of finished steel and avoid supply chain disruptions. But buyers have no guarantees of consignments getting cleared because of restrictions,” he added.
Sources said that a Gujarat-based secondary steel mill cum trading firm has reported a trade of ex-US containerized shredded scrap at around $440-445/mt CFR early in the week. Another deal for the same grade was heard at $455/mt CFR on Monday.
A secondary mill based around Raipur in central India reported a trade for US origin HMS I/II bulk scrap totaling around 30,000 mt at a price of around $425-435/mt CFR Kandla port in the west.
With interest in local sourcing rising, scrap prices at Mandi Govindgarh in the north gained INR 500/mt ($7/mt) to INR 39,500/mt ($526/mt) ex-stockyard, while it was up INR 1,000/mt ($14/mt ) at INR 33,000/mt ($439/mt) ex-stockyard at Alang in the west.
$1 = INR 75.10