India’s imported scrap trade has picked up during the past week with the increase in prices and the upturn in local scrap market.
Market sources have told SteelOrbis that the combination of gains in scrap prices seen in key markets like Turkey, the resumption of bulk buying by Pakistan and the shortage of containers and disruptions in shipping schedules has pushed up imported scrap prices but have not deterred secondary steel mills from restocking. The sources said that there was a rush to conclude bookings at even higher CFR prices as both exporters and importers expect container shortages to increase and April-May deliveries to tighten further with difficulties in securing vessels from April onwards, particularly for liners plying between US and Asia, with stray reports indicating that some liners are even refusing tonnages. The uncertainties have been prompting Indian scrap importers to rush to conclude scrap deals as long as deliveries have been ensured since this might not be possible for post-April deliveries, as a Kolkata-based freight forwarder has told SteelOrbis.
Moreover, most secondary steel mills in India had been able to increase rebar prices during the past weeks and higher realizations from finished products enabled them to increase restocking of import raw material.
Ex-Europe shredded scrap prices have added about $10/mt over the past week. One Gujarat-based secondary steel mill-cum-scrap trader has made a deal for 30,000 mt of shredded scrap at $309/mt CFR Kandla port, higher than the deals concluded at $300/mt CFR Kandla early last week.
The same importer has concluded a deal for ex-UAE scrap at $300/mt CFR Kandla for early April delivery, versus $298/mt CFR in contracts in the previous week, sources said.
Higher prices have also been reflected in deals with US suppliers. A western India-based secondary rebar producer has concluded a booking for ex-US HMS I/II 80:20 at $315/mt CFR Nhava Seva port for end-of-March delivery, up by $15/mt over the past week.
The shift to imports by secondary steel mills is also owing to a surge in prices in the domestic market, where scrap prices have increased by INR 700/mt ($10/mt) to INR 23,350/mt ($325/mt) ex-stockyard Mandi Govindgarh in northern India. Prices are up INR 500/mt ($7/mt) to INR 22,600/mt ($315/mt) ex-stockyard Alang in the west and with the differential between local and imported prices narrowing significantly during the past week.
$1 = INR 71.80