After a weak start of the week, import scrap offer prices in India have staged a recovery with sellers expecting the market to have bottomed out, but local buying has continued at a low ebb amid worsening sentiments with more regions coming under lockdown restrictions, SteelOrbis has learned from trade and industry circles on Wednesday, March 31.
Sources said that secondary steel mills do not have an appetite to restock raw materials immediately in view of the weak rebar market. However, some in the market have said that some revival in the import trade could be a possibility as both primary and secondary steel mills have almost finalized hikes in flat and long product prices in April, which would offer some cushion for secondary mills to improve raw material bookings.
Sources said that early in the week ex-US containerized shredded scrap offers were heard at $415/mt CFR Nhava Sheva port in the west, compared to $420-430/mt CFR a week ago. However, offers levels have recovered slightly towards the close of the week to $430/mt CFR minimum, although most of the limited tonnage trades have been reported at a lower level and higher offers have caused most buyers to retreat from the market. The SteelOrbis reference price for import shredded scrap has settled at $415-430/mt CFR Nhava Sheva this week, down by $2.5/mt on average from last week.
“The short-term upside to imported scrap prices is still uncertain. But the rebound in prices has come at a time when local rebar demand and prices are once again entering uncertain territory. An April price rise can offer secondary steel mills some headroom to absorb higher raw material prices, subject to the market’s ability to absorb higher rebar prices,” a member of the Metal Recycling Association of India (MRAI) said.
“Prices in bellwether buying markets like Turkey are improving. But local trading activity will remain muted in view of secondary mills being under pressure from demand and prices of finished products,” he added.
Traders said that the Indian currency hitting its weakest level in four weeks at INR 73.40 to the US dollar and currency traders forecasting another four percent depreciation from the current levels have also prompted importers to become cautious about making bookings in a rising scrap market.
Sources said that a secondary mill based at Raipur in the central region of India has reported a trade for ex-US containerized shredded scrap at a price of around $415-420/mt CFR Nhava Sheva port for May delivery.
A Maharashtra-based secondary steel mill cum trading firm has reported a trade for ex-US bulk HMS I/II scrap at a price of around $390-400/mt CFR Kandla port in the west.
With low trading also persisting in the local market, the scrap price has remained unchanged at INR 38,000/mt ($518/mt) ex-stockyard at Mandi Gobindgarh in the north and has remained at INR 31,250/mt ($426/mt) ex-stockyard at Alang in the west.
$1 = INR 73.40