Softening of ex-US scrap prices triggers increased restocking by Indian mills

Wednesday, 01 July 2020 16:21:50 (GMT+3)   |   Kolkata
       

India’s import scrap trading activity has continued to gain momentum during the past week as secondary steel mills have continued to restock to ramp up capacity utilizations and their efforts have been supported by the sharp fall in ex-US scrap prices, the increase in availability and the easing of local port handling conditions, SteelOrbis learned on Wednesday, July 1.

A larger number of secondary steel mills had started to shift from sponge iron as feedstock to imported scrap with prices softening and also because scrap input offers better production qualities. This resulted in not only improvements in the number of import contracts concluded during the past week, but average tonnages have also been higher, traders said.

Prices for ex-US HMS I/II 80:20 originating from the US West Coast are down $7/mt on CFR basis compared to the previous week, while the containerized shredded scrap price is down $5-8/mt on CFR basis.

Sources said that a Maharashtra-based electric arc furnace steel mill has concluded an import contract for September delivery of an estimated volume of around 42,000 mt of ex-US West Coast bulk HMS I/II 80:20 at a price estimated at $258-260/mt CFR Nhava Seva in the west, compared to deals for ex-US scrap in the range of $265-267/mt CFR in the earlier week.

Two Gujarat-based steel mills and a trading firm booked a tonnage of 55,000 mt as a consortium from a US West Coast supplier at around $260/mt CFR Kandla port for September delivery for HMS I/II bulk cargo, market sources said.

Another western India-based secondary steel mill concluded an early September supply contract for containerized ex-US shredded scrap at $265-266/mt CFR Nhava Seva. This was lower compared to ex-UK shredded scrap deals which were concluded at the range of $270-274/mt CFR in the earlier week.

The shift from sponge iron to scrap as feedstock by a number of secondary producers has also provided support for local scrap prices. Prices are up INR 300/mt ($4/mt) to INR 21,600/mt ($286/mt) ex-stockyard at Mandi Govindgarh in the north and up INR 400/mt ($5/mt) to INR 20,500/mt ($272/mt) ex-stockyard at Alang in the west.

$1 = INR 75.50


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