Indian local scrap prices have remained stable for the second consecutive week, supported by strong import offers though import deals remained limited and most secondary market buying activity focused on local stockyards in response to the continued weakness of the local currency, traders said on Wednesday, November 20.
According to the traders, both ex-US and ex-UAE import offers have remained stable at higher levels but domestic secondary steel producers stayed away from active bookings considering that the Indian rupee continued at a two-month low, weaker than INR 71 to the dollar, and finished steel prices have still been showing mixed trends, reducing the pricing power of producers to pass on higher input costs.
Local scrap prices have remained at INR 23,100/mt ($322/mt) ex-stockyard at Mandi Govindgarh in northern India. Scrap prices are stable at INR 22,200/mt ($310/mt) ex-stockyard at Alang in western India.
The sources said that ex-UAE scrap offers remained steady at $265-270/mt CFR Nhava Seva port in western India, while US origin scrap offers were maintained at higher levels at $275-281/mt CFR Nhava Seva.
“Import offers have upside potential. North American steel prices are seen to be on an uptrend and this will push up scrap export offers. Reports received in India indicate that shipment volumes into Turkey have increased during the past week but even higher availability is not impacting higher export offers,” a member of the Metal Recycling Association of India (MRAI) said.
“However, secondary steel producers in India can be expected to continue to source even small volumes from local stockyards and most of them will be unable to pass on higher scrap import prices in their finished steel prices as tentative attempts to increase finished steel prices are facing buyers’ resistance as indicated by the rollback of rebar prices by producers during the past week,” he added.
$1 = INR 71.70