Import scrap prices in India have exceeded the $400/mt CFR mark during the past week on the back of a further consolidation of international prices, tight freight availability, a lack of offers for ex-UK tonnages and improved sentiments among local secondary steel mills following the resurgence in rebar prices and demand, traders said on Wednesday, December 16.
The traders said that UK yards had stopped submitting offers to buyers in India for both containerized shredded ferrous scrap and HMS I&II (80:20), further aggravating the supply side and triggering a surge in the landed price of ex-US shredded scrap prices in the local market.
Sources said that ex-US shredded scrap prices have hardened with deals reported in the range of $400-405/mt CFR Nhava Seva, with at least one deal at a weekly high of $410/mt CFR. This compared to deals concluded at levels of $385-390/mt CFR in the earlier week.
According to these sources, Indian secondary steel mills are more optimistic about concluding import scrap deals following the revival of demand in the local rebar market but are somewhat restricted as they are having to compete with high trading activity in neighboring Pakistan, which is securing contracts at higher prices reported at around $410/mt CFR.
They said that a Gujarat-based secondary steel mill cum trading firm has concluded a trade of around 25,000 mt for end-of-March delivery at a price of around $405/mt CFR for ex-US shredded containerized scrap.
A Raipur-based steel mill in central India has reported a trade for end-of-February delivery for 20,000 mt of ex-US shredded scrap at a price of $410/mt CFR, with sources attributing the higher price to the comparatively early delivery at a time when container shortages and freight rates are fueling prices.
A Gujarat-based ferrous and non-ferrous scrap trading firm which has become active in restocking in view of the surge in prices likely being sustained, has concluded a booking of around 30,000 mt of ex-US shredded scrap at around $408/mt CFR Kandla port.
Supplies from the local scrap yards to secondary steel mills have also continued to be disrupted by widespread protests by farmers across northern Indian states, with buyers complaining of increased delivery times from markets like Mandi Govindgarh, triggering gains in local scrap prices.
Scrap prices are up INR 1000/mt ($14/mt) at INR 32,000 mt ($435/mt) ex-stockyard at Mandi Govindgarh but trades are limited as buyers have apprehended disruptions and delays in transportations, with protesting farmers blocking several major highways.
The price is up INR 500/mt ($7/mt ) to INR 28,300/mt ($384/mt) ex-stockyard at Alang in the west.
“Scrap prices are skyrocketing. But local secondary steel mills despite the slight improvement in rebar prices have no option but to restock raw materials as prices will continue to rise through January as quoted freight rates are rising. Also, there is strong competition in securing supplies from rising scrap demand in Bangladesh and Pakistan,” a member of the Metal Recycling Association of India (MRAI) said.
“We are expecting some easing of the price rise if yards in the UK return to submit offers after the Christmas holidays,’ he added.
$1 = INR 73.60