Indian imported scrap prices edged lower amid weak buying interest as induction furnace operators were unwilling to risks of foreign currency deals due to exchange rate volatility and continued losses seen in the finished long products market, SteelOrbis learned from trade and industry sources said on Wednesday, October 29.
Sources said that ex-UK/Europe containerized shredded scrap offers softened by $2-3/mt to $353-357/mt CFR Nhava Sheva port in the west but no deals were reported after low bids in range of $346-348/mt CFR were rejected by sellers.
Ex-UK offers for HMS I/II (80:20) scrap were also lowered to $315-320/mt CFR compared to $320-325/mt CFR a week ago, however no deals were reported in the market.
The sources pointed out that local scrap prices softened over the past week , becoming a better option for secondary mills to meet their limited demand for raw materials as furnaces were being operated at lower utilization levels following market oversupply and rise in mills' steel inventories. Local scrap prices lost INR 600/mt ($7/mt) at INR 29,900/mt ($339/mt) ex-Mandi Govindgarh in the north, while sponge iron price softened INR 300/mt ($4/mt) at INR 26,100/mt ($296/mt) ex-Raipur in central regional market.
“Secondary mills have little confidence in taking on risks of imports at a time when long product market entered a new downward cycle. Most furnaces have lowered utilization levels to 60-70 percent, thereby lowering raw material volume requirements,” a Mumbai based ferrous and non-ferrous scrap dealer, said.
“The rupee volatility is also an additional risk. The local currency has once again deprecating rapidly against the US dollar to slump below the INR 88.00 a dollar market increasing landed price and costs of currency hedging and freight,” he added.
