The momentum of India’s imported scrap trading activity has improved slightly over the past week with secondary steel mills getting ready to normalize operations. Although buyers have remained cautious, they have had to accept higher prices, sources told SteelOrbis on Wednesday, May 27.
According to market sources, with the ban on imports from the UAE, the prime import market for India, Indian secondary steel mills have been forced to look at deals for ex-UK and ex-Europe shredded scrap, despite the prices of latter consolidating at higher levels on CFR basis.
The reference price for ex-UK and ex-EU shredded scrap was at $278-280/mt CFR Nhava Seva port in the west, while offers were at $280-285/mt CFR. Offers were at $280-290/mt CFR in the previous week, but, if last week the workable level was not above $270/mt CFR, at the moment $280/mt CFR has already been reached in contracts, sources have said.
Trading across the country, which had come to a near halt during the lockdown imposed on March 25, has been showing signs of a revival with the restrictions on manufacturing being eased in phases and the number of secondary mills responding to inquiries has increased even as the tonnages booked have remained limited, the sources added.
With the comparatively cheaper alternative of ex-UAE scrap not available, a Gujarat-based secondary steel mill and scrap trader has concluded a deal for 25,000 mt of ex-UK shredded scrap at $278-280/mt CFR for August delivery, with sources saying that the mill is confident that both mill operations and congestions at western ports like Nhava Seva and Kandla will have eased by that time.
A Maharashtra-based secondary steel mill, located in a region with comparatively low Covid 19 incidence in the the state, has reported a deal for 15,000 mt of shredded scrap at the slightly higher price of $280/mt CFR Nhava Seva.
“I concluded the deal even though my two containers are still stuck at the port for over three weeks since delivery. I am restocking largely because we cannot keep our plant idle any longer and hope to be able to at least increase our plant capacity utilization to 50 percent over the next two months,” the CEO of the Indian secondary mill said. “Also, we are unable to source scrap from the local market from a distance like Gujarat or Punjab as there is no labor available in these markets to ensure consignments,” he added.
The absence of labor for loading and unloading and operations of road transport is also cited as a major reason for scrap prices falling in the local market despite the tightening of availability of imports in the wake of the UAE export ban, traders said.
Scrap prices are down INR 200/mt ($3/mt) to INR 21,300/mt ($281/mt) ex-stockyard at Mandi Givndgarh in the north. Prices have edged down INR 200/mt ($3/mt) to INR 20,000/mt ($264/mt) ex-stockyard at Alang in the west.
$1 = INR 75.70