Import scrap prices in India are still under pressure and most buyers assess them as being unacceptable and have been asking for discounts due to the steady weakening of finished steel prices, with secondary mills facing rising inventories and planning output cuts, resulting in declining demand for raw materials, SteelOrbis learned from trade and industry circles on Wednesday, June 10.
Ex-UK/Europe containerized shredded scrap offers have been pushed up by sellers to $400-403/mt CFR Nhava Sheva port in the west, compared to nominal levels of $390-400/mt CFR a week ago, but this has not been assessed by market sources as an improvement. “Yes, some deals at $400/mt CFR are possible, but only for rare customers in Mundra, nothing more,” a source said.
In contrast, ex-UK HMS I/II offers are reported $355-358/mt CFR, slightly down from levels of $360-363/mt CFR a week ago, but, with bids at lows of $345-350/mt CFR, trade activity has also remained weak for this grade. Some sellers are reported to have adjusted offers to around $352-355/mt CFR.
The sources said that buyers have been persistently resisting higher price levels as secondary mills have not been in a position to pass on higher raw material costs to consumers. It was pointed out that construction grade steel demand and prices are on a sustained decline, which is expected to get sharper in the coming months as the onset of the monsoon rains will slowdown construction activities across the country and further depress long steel demand.
With secondary mills already planning output cuts for the monsoon season, local sourcing has been preferred to meet the limited raw material requirements, the sources said.
“Finished steel margins in the case of construction grades are close to negative at current sales prices. Mills have higher-than-average inventories, resulting in strained cash flows. So, even a marginal increase in raw material prices is unacceptable,” a Mumbai-based ferrous and non-ferrous metal distributor said.
“Given weak demand and price resistance, distributors like us have stopped importing any grades of scrap for the past several months. We cannot afford to be left to idle stocks,” he added.
