Import scrap prices in India have held their ground over the past week, but trade has stalled amid the local currency continuing to depreciate to new historical lows on a daily basis, while secondary mills have lacked confidence in restocking raw materials, following the further weakening of finished steel prices, SteelOrbis learned from trade and industry circles on Wednesday, September 17.
Ex-UK/Europe containerized shredded scrap offers are stable in the range of $360-365/mt CFR Nhava Sheva port in the west, while ex-UK HMS I/II (80:20) scrap is also stable, at $325-330/mt CFR.
The sources said that finished long steel products have continued to suffer setbacks particularly from secondary mills, the predominant players in regional markets, which are posting the sharpest slowdown in stock movements and price losses. Hence, these mills have been in no mood to lock in liquidity in long deliveries of imported scrap, along with higher costs.
At the same time, the Indian rupee has weakened further than INR 88 to the dollar and currency dealers foresee levels of INR 89.00 to the dollar in the short term. This rapid depreciation of the rupee entails a higher landed cost burden on importers along with higher costs of currency hedging and freight insurance, which is not justified by current finished steel margins, the sources said.
Also, in contrast to earlier weeks, secondary mills are also not submitting lower counter-bids since they have preferred to source lower-cost local scrap, entailing lower risks of extended delivery and currency volatility, the sources pointed out.