India’s scrap import activity has lost some of its earlier momentum in reaction to the combination of the slight increase in ex-US prices resulting in lower bookings by secondary steel mills which have been hit by more uncertainties as more regions across the country announce fresh lockdown measures, sources said on Wednesday, July 8.
The import scrap market and secondary steel mills are also not sure how much prices will react to South Africa announcing a ban on ferrous scrap exports for two months, while a similar ban continues in the case of shipments from the UAE.
According to sources at the Metal Recycling Association of India (MRAI), scrap imports from South Africa constitute about six percent of total inward shipment into India and an estimated 400,000 mt was shipped into the country in the previous fiscal year. The sources said that the combined bans on scrap exports from the UAE and South Africa will push up the landed price of imports and the signs of this are already evident in the increase in ex-US prices and the uptrend may gain momentum over the next few weeks.
However, with several regions across India, like the eastern state of West Bengal, Maharashtra in the west and Tamil Nadu in the south, announcing a fresh round of lockdown measures as Covid-19 cases increases exponentially, secondary steel mills which were just about resuming operations are expected to revise their plans and hence the ease off in restocking of raw materials.
Sources said that prices of ex-US bulk HMS I/II (80:20) originating from the West Coast are in the range of $260-270/mt CFR compared to deals concluded at $258-260/mt CFR in the previous week. Ex-US containerized shredded scrap prices are also up, rising by $5-10/mt on CFR basis during the past week.
It has been learned that a western India-based arc furnace route steel mill concluded a deal for ex-US bulk HMS I/II scrap for an estimated volume of 25,000 mt in the range of $262-267/mt CFR Nhava Sheva port.
A Raipur-based steel mill in central India has reported a deal for 20,000 mt containerized shredded scrap originating from the US West Coast in the price range of $270-275/mt CFR Kandla port in Gujarat. This compared to deals concluded for similar ex-US containerized tonnages at $266/mt CFR in the previous week.
Sources said that offers for ex-UK containerized shredded scrap were reported in the market at around $274-279/mt CFR Nhava Sheva, but this was not accepted by buyers in the western region.
In reaction to higher import prices, local scrap prices too have edged up although volumes traded have remained very low amid lack of interest among secondary steel mills in continuing to aggressively restock. Sources said that local scrap prices have increased by INR 200/mt ($3/mt) to INR 21,800/mt ($291/mt) ex-stockyard at Mandi Govindgarh in northern India, while they are up INR 300/mt ($4/mt) to INR 20,800/mt ($277/mt ) ex-stockyard at Alang in the west.
$1 = INR 74.90