Indian scrap buyers prefer cheaper local sourcing instead of imports

Import scrap prices in India have remained relatively stable amid inactive market conditions as secondary mills have preferred local sourcing given easy availability and further declines in local scrap prices, SteelOrbis learned from trade and industry circles on Wednesday, February 19.

Ex-UK/Europe containerized shredded scrap offers are stable in the range of $375-380/mt CFR Nhava Sheva port in the west, while buyers’ price ideas have remained at not above $370/mt CFR.  A single deal for a small tonnage was done at $370/mt CFR this week, so the reference price for imported shredded scrap in India has remained stable at this level. Offers for HMS (80:20) for UK origin have been quoted at $355-360/mt CFR, while ex-West Africa HMS could be available at $345-350/mt CFR, and some deals for HMS I/II (80:20) or unknown origin have been reported at $350/mt CFR.

Some trade and industry circles said that import scrap prices are poised for a surge in reaction to the higher steel tariffs proposed by the US Administration. They argued that higher tariffs and resultant fall in imports of steel into US would prompt local scrap-based steel mills to increase output. Hence, higher US domestic demand for scrap can trigger lower outward shipments and a tightening of global supplies, triggering the next uptrend.

While the outlook for higher import prices has kept Indian buyers on the sidelines, local secondary mills have had better local alternatives with scrap prices declining INR 600/mt ($7/mt) over the past week and the current indicative price at around INR 33,000/mt ($379/mt) ex-Mandi Govindgarh in the north, offering a better alternative to induction furnace operators.

“Indian scrap importers are unlikely to move unless prices are more attractive. But this is unlikely as scrap supply dynamics are poised to change. The Indian rupee has continued to depreciate sharply against the dollar. Both elements will keep import prices elevated. We do not see any immediate interest in imports from local users,” a Mumbai-based ferrous and non-ferrous scrap trader said.