Indian secondary steel mills have attempted to restart operations and have been showing some interest in the restocking of raw materials. However, trading has been hit by tight supplies, high import prices of ex-UK shredded containerized scrap and logistical bottlenecks in local sourcing from scraps yards in the western and northern regions, SteelOrbis has learned.
Market sources said that ex-UK shredded scrap containerized offers have inched up marginally to the range of $285-288/mt CFR Nhava Seva port, compared to $282-287/mt CFR last week and, not only were prices higher, but only limited offers were available to secondary steel mills in India, which were preparing to restart their mills amid reduced lockdown restrictions.
The sources said that only two import trades have been reported by two secondary steel mills over the past week and that only because final deals were able to be concluded at slightly lower levels than offers. Secondary steel mills are very interested in concluding deals as the logistics involved are easier than for local sourcing, but limited availability and high prices are making them cautious, the sources said.
A Gujarat-based steel mill-cum-trading firm has concluded an ex-UK containerized scrap deal for 12,000 mt at $280/mt CFR Kandla port for August shipment. The sources said that the slightly lower price level compared to the offered level was possible because of lower freight charges at Kandla port, which has a comparatively faster turnaround time for vessels.
However, a Maharashtra-based secondary mill was also able to conclude a deal at $285/mt CFR Nhava Seva, for 15,000 mt to the west coast port.
“The two deals were reportedly concluded only because importers were able to clinch a lower price. The secondary sector is keen to restock as raw materials availability for August is very tight. But most importers do not have much sourcing choice other than ex-UK material at this point of time,” an official at Metal Recycling Association of India (MRAI) said.
Meanwhile, scrap prices in the local market have continued on a downtrend while buyers have little option in taking deliveries owing to transport and logistic challenges and the shortage of loading and unloading manpower. At Mandi Govindgarh in northern India scrap prices are down INR 100/mt ($1.30/mt) to INR 21,000/mt ($278/mt) ex-stockyard, while at Alang in the west prices are down INR 200/mt ($2.60/mt) to INR 19,600/mt ($260/mt) ex-stockyard.
$1 = INR 75.50