India’s imported scrap trading activity has increased during the past week, with bookings of ex-US scrap reported in the market after a pause, but some local secondary steel mills have held back from bookings, anticipating prices will fall in reaction to higher availability from the US in July, SteelOrbis has learned on Wednesday, June 17.
According to traders, the softening of freight rates of shipping lines from the US West Coast made prices competitive compared to ex-UK shredded scrap that a few Indian secondary mills had been compelled to book in recent weeks, soon after the ban on exports imposed by the UAE.
Market sources said that a secondary steel producer located in the western state of Gujarat concluded a transaction of ex-US bulk HMS I/II (80:20) of around 12,000 mt at $280/mt CFR Kandla port. The previous deal for a mixed cargo of shredded scrap and HMS I/II (80:20) from the US to India was reported in early June at the same price level.
Another western India-based electric arc furnace based steel mill concluded a higher volume booking for 25,000 mt of HMS I/II (80:20) from the US West Coast at an average price reportedly in the range of $282-284/mt CFR Kandla port.
Anticipating higher availability of ex-US scrap, lower prices in July and improvement in both shipping lines to Indian ports and freight costs, most secondary steel producers have been pulling back from activity buying ex-UK scrap.
Sources said that a Maharashtra-based steel mill has concluded a contract for end-of-August delivery of 10,000 mt of ex-UK containerized shredded scrap at around $286/mt CFR Nhava Seval port. This compares to offers in the earlier week for ex-UK shredded scrap in the range of $285-288/mt CFR, market sources said.
The sources said that, with higher availability and the expected softening of prices in the future, several secondary steel mills which had shifted to sponge iron as feedstock for their mills, are expected to revert back to imported scrap. They pointed out that, while sourcing local sponge iron for their steel mills had been a cost-cutting measure earlier, imported steel scrap feedstock is of better quality and ensures higher mill productivity levels.
As secondary steel mills resumed restocking, trading activity in the local scrap market has also improved slightly, with prices maintaining their levels, even though a few steel mills claimed continued challenges in internal cross-border logistics and transportation including a shortage of labor for loading and unloading. Scrap prices have been maintained at INR 21,000/mt ($276/mt) ex-stockyard at Mandi Govindgarh in the north, while prices are also stable at INR 19,600/mt ($258/mt) ex-stockyard at Alang in the west.
$1 = INR 76.00