India’s scrap import market has fallen completely silent with buyers nervous over further price increases, largely attributed to higher freight costs, and local secondary mills are cautious as the raw material price rise has been outpacing the rise in rebar prices, SteelOrbis has learned from trade and industry circles on Wednesday, March 3.
The sources said that strong finished steel prices, tight supplies of scrap, and the higher level buying in China and Turkey have contributed to higher imported scrap prices, while higher freight costs have been cited as a significant contributory element in skyrocketing imported scrap prices.
Sources said that, while no import deals have been heard in the market, the ex-US shredded containerized shredded scrap price level that could be reached in deals increased to $455-460/mt CFR Nhava Sheva port in the west, up from $425-435/mt CFR a week ago.
At least two sources said that they had heard ex-US offers as high as $470-480/mt CFR, but there has been a lot of nervousness regarding such high offers among secondary steel buyers, who are unsure if they will be able to pass on higher input costs to rebar consumers.
“Scrap prices are moving up too fast and too high. The import market has no activity and no buying. A secondary mill has to be very brave to commit any import transaction when rebar price sustainability is uncertain, and the local currency depreciating rapidly. All benefits of the nil rate of import duty effected recently have been wiped off by the price increase,” a member of the Metal Recycling Association of India (MRAI) said.
Reacting to the near-halt of imports and the higher volume of local sourcing, domestic scrap prices have sought higher levels, moving up INR 1,000/mt ($14/mt) to INR 39,500/mt ($538/mt) ex-stockyard at Mandi Govindgarh in the north and up INR 500/mt ($7/mt) to INR 33,250/mt ($452/mt) ex-stockyard at Alang in the west.
$1 = INR 73.40