Import scrap prices in India have remained stable showing marginal changes, but buyers have continued to remain on the sidelines as sustained declines in the local scrap prices mean that local sourcing is the preferred choice for most secondary mills to meet the limited raw material demand after reducing plant capacity utilizations, SteelOrbis learned from trade and industry circles on Wednesday, July 23.
Sources said that ex-UK/Europe containerized shredded scrap prices have been kept steady in the range of $360-365/mt CFR Nhava Sheva port in the west, but bids are at $350/mt CFR amid the very cautious mood in the market, with no deals confirmed. Offers for HMS I/II (80:20) of UK origin are also stable at $335-340/mt CFR, with a few buyers targeting $325-330/mt CFR, but sellers have declined such bids.
According to the sources, since the construction steel market has continued to remain on a downtrend, induction furnace operators have had no option to pass on higher raw material costs to their customers. In fact, on the contrary, the sources said that most secondary mills have been seeking to lower input costs by increasing local sourcing of bulk scrap, the prices of which have showed steady declines.
Bulk scrap prices have lost INR 200/mt ($2/mt) to INR 31,900/mt ($369/mt) ex-Mandi Govindgarh in the north, with additional two to three percent volume-based discounts making it the preferred choice of induction furnace operators.
It was also pointed out that aggregate scrap demand is also falling as the secondary sector’s average capacity utilization is down to the range of 70-75 percent in the face of the sluggish construction steel market, rising inventories and pressures on margins.