Imported scrap prices in India have continued to seek higher levels over the past week, but local liquidity-strapped secondary steel mills have tended to defer trades anticipating that the slight easing of the rate of price increase could be a precursor to a price correction later this month, traders and importing mills said on Wednesday, January 13.
Market sources said that containerized shredded scrap deal prices are at $470-478/mt CFR Nhava Sheva port in the west, compared to $455-460/mt CFR a week ago. Though a few stray deals were concluded at the lower end of the range, most offers have been coming at above $480/mt CFR.
“We are keeping a close watch on prices which seem to be losing momentum. A correction would be a positive for importers, but it is too early to take a call, since buying still remains strong in key importing markets like Turkey,” a member of the Metal Recycling Association of India (MRAI) said. “Some traders are saying that they will wait till the end of January for a correction. Until then secondary steel mills are largely tending to source scrap from the local market and rely more on direct reduction iron (DRI), the domestic price of which is almost on a par with the landed price of imported ferrous scrap and without risks of foreign exchange fluctuations,” he said.
According to sources a western India-based steel mill has concluded a trade of UK origin bulk HMS I/II 80:20 at a price of around $430-440/mt CFR Kandla port.
Another central India-based secondary steel mill at Raigarh has reported a trade for containerized shredded scrap at a price of around $470-475/mt CFR Nhava Sheva port for April delivery, the sources added.
Several traders said that bookings for local scrap increased during the past week as buyers are fearful of greater logistical disruptions since farmers protesting across northern India have announced the stepping up of their protests and are blockading highways and heading towards Delhi in the run-up to the Republic Day celebrations in the national capital, leading to a surge in prices. Sources said that scrap prices at Mandi Govindgarh have increased INR 1,000/mt ($14/mt) to INR 37,500/mt ($512/mt) ex-stockyard with additional premiums reported at an additional INR 500/mt ($7/mt). Prices have edged up at Alang in the west by INR 500/mt ($7/mt) to INR 32,300/mt ($441/mt) ex-stockyard.
$1 = INR 73.30