India: Chennai scrap prices inch up by INR 100/t w-o-w amid mixed market trends

According to BigMint's latest update, the steel market in Chennai experienced slight fluctuations. HMS (80:20) scrap prices rose by INR 100/t w-o-w, now at INR 30,800/t, with no changes observed d-o-d.

Billet prices were stable d-o-d, but showed a modest rise of INR 200/t w-o-w, reaching INR 41,500/t. Rebar prices also saw a minor increase of INR 100/t, bringing them to INR 45,800/t, stable d-o-d. The market displays a mixed but relatively stable trend with minor price changes.

Imported and domestic price trends

Current workable levels for open-origin HMS 80:20 are $355-360/t CFR Chennai. Meanwhile, a bid-offer disparity is observed with Australian shredded scrap offered at $370-375/t, though counter bids are at $360-365/t as buyers remain hesitant to accept higher prices.

"As prices approach their bottom, some markets are showing signs of recovery; traders are expecting restocking activity, and if the upcoming Budget emphasises infrastructure spending, we could see additional support for the rebar market in the months following February," noted a scrap trader.

In the domestic market, HMS (80:20) scrap prices were quoted between INR 30,500 and INR 31,000/t for buyers with payment terms of seven days. For transactions involving extended payment terms, prices ranged from INR 31,000 to INR 31,500/t.

The majority of offers remained within the INR 30,500-31,000/t range, and a significant portion of deals were closed at these price levels, indicating stability in the current market conditions.

Buyer-supplier sentiments

According to a mill representative, finished steel demand remains subdued, with buyers opting for need-based procurement rather than bulk purchases. In response, some mills are looking to sell billets under advance payment terms to better manage liquidity. Scrap purchase levels, however, have remained stable, indicating consistent demand for raw materials, despite the lower finished steel demand.

According to a scrap supplier, HMS (80:20) scrap prices in the domestic market are currently trading in the range of INR 30,500-31,500/t, with variations depending on payment terms. The market is grappling with a liquidity crunch, which has contributed to sluggish trade activity, particularly in the finished steel segment over the past few weeks. While scrap prices remain within a stable range, the overall market sentiment remains cautious. The liquidity situation is expected to influence trade activity and pricing trends in the near term.

Regional comparison

In the western India-based Jalna market, billet prices rose by INR 500/t w-o-w, reaching INR 41,800/t, while rebar prices increased by INR 600/t w-o-w, now at INR 46,800/t. HMS 80:20 scrap prices also saw a rise, up by INR 400/t w-o-w to INR 31,800/t. Despite these increases, prices for all materials remained stable on a d-o-d basis. Notably, trade activity has picked up this week, especially in the semi-finished and finished steel sectors.

Outlook

With the annual Budget announcement expected this weekend, the steel market is likely to experience positive movement in the coming weeks. Additionally, as summer approaches, there is an anticipation of increased trade activity, particularly in finished steel. These factors combined may stimulate demand and drive market momentum in the near future.