Imported scrap prices in India have continued to surge amid a combination of factors, prompting secondary steel mills to become more cautious as regards concluding bookings at the current higher levels, SteelOrbis learned on Wednesday, November 11.
High transaction activity and price increases in key bellwether markets like Turkey and unavailability of containers on lines plying to Asian countries have continued to push up imported scrap prices in India.
Market sources said that ex-US containerized shredded scrap prices have surged $8-10/mt to levels of $334-338/mt CFR Nhava Sheva port in the west. The price of bulk HMS I/II has also risen to $315-320/mt CFR.
But most buyers have been cautious in committing transactions at the current high levels even though supplies in the local market are constrained. The sources said that supplies from the key scrap market of Mandi Govindgarh in northern India have almost come to a halt after state transporter Indian Railways (IR) halted freight train movements in Punjab in response to farmers’ agitation, and road transport capacities have not been sufficient for scrap movement.
A source said that secondary steel mills in Punjab source about 100,000 mt of ferrous scrap locally, which have completely dried up in the absence of transportation, while scrap from local stockyards is also not being moved out of the state. Imported scrap is also not available from ports along the west coast as freight trains are not operating and road transport capacity is either too limited or too expensive.
Traders said that there have been several reports of unavailability of quotes for container bookings for December loading in case of ex-US scrap as several shipping lines have been reluctant to accept bookings to the Asian region as the low exports from the region entail the risk of empty containers on return voyages.
“The scrap market is going up too fast and is unlikely to come under any correction immediately and this is making local buyers very nervous. There are lot of concerns over logistics in import shipments as sellers are reporting cancellations of container bookings for December loading. At the same time, with freight trains not plying in Punjab in the north, there is hardly any supply from the key north India scrap market of Mandi Govindgarh,” a member of the Metal Recycling Association of India (MRAI) said.
Market sources said among the large secondary steel mills who are able to make bookings was a Gujarat-based rebar producer cum trading house which reported a trade for ex-US containerized shredded scrap of around 20,000 mt at a price of around $338/mt Nhava Sheva for end-of-January delivery.
In the local market, despite logistical challenges and tonnages already booked stuck at stockyards in the absence of transportation, the scrap price at Mandi Govindgarh continued to increase for another week, moving up INR 500/mt ($7/mt) to INR 27,900/mt ($376/mt) ex-stockyard, while the price at Alang in the west edged up INR 200/mt ($3/mt) to INR 24,800/mt ($334/mt) ex-stockyard.
$1 = INR 74.20