India: Chennai's ferrous scrap prices drop by INR 400/t w-o-w on weak steel demand - 24 Oct

• Semis, finished prices remain steady d-o-d
  
  
• Festive buzz, Cyclone Dana impact market
  
  

As per BigMint's latest assessment, HMS (80:20) scrap prices in Chennai declined by INR 400/t w-o-w, though they remained steady d-o-d at INR 31,800/tonne (t). Additionally, billet and rebar prices were firm at INR 42,500/t and INR 47,000/t, respectively.

Ferrous scrap prices declined amid weak demand in the steel segment. Additionally, steel trade activity was muted today due to the upcoming Diwali festival and concerns over the impact of Cyclone Dana in Odisha.

Import, domestic market trends

The current state of the scrap market remains unfavourable, with sporadic sales and slow demand. HMS imports were quoted at around $370-375/t, while shredded was offered at $390/t. Busheling was priced at $405-410/t, with 500 t sold recently in Chennai at $410/t, a trader informed BigMint.

In the domestic market, HMS 80:20 scrap prices stood at INR 31,500-32,000/t for buyers offering payment within seven days. Some buyers pushed bids lower to INR 31,000-31,500/t, considering the reduced demand for finished materials. For extended payment periods, prices climbed up to INR 32,000-32,500/t. Most offers remained steady at INR 31,500-32,000/t, with transactions largely taking place in this range.

Buyer-supplier sentiments

A mill owner observed, "Steel trades have slowed down ahead of the Diwali festival, leading to limited movement in the market. A marginal decline in finished steel prices is expected in the coming days. Despite this, scrap supply to mills is currently stable. However, potential rainfall in Chennai due to Cyclone Dana could further reduce the demand for finished steel."

According to a scrap supplier, "The HMS 80:20 scrap market remains stable, with prices hovering at INR 31,500-32,000/t. Unlike billet and rebar, scrap prices have not seen significant declines recently. This stability is because scrap has not experienced the same sharp rise that billet and rebar prices have."

Region-wise comparison

In western India's Jalna market, billet, rebar, and HMS 80:20 prices dropped by INR 100/t to INR 41,700/t, INR 47,500/t, and INR 32,500/t, respectively. While rebar trade activity was slow, mills received adequate domestic scrap supplies. However, ongoing liquidity concerns are putting pressure on market dynamics.

Outlook

Scrap prices are expected to remain mostly stable or see a slight dip of around INR 500/t in the coming days. Diwali festivities will likely slow down trade activity in finished steel, contributing to a potential price reduction.