India: Domestic Melting Scrap Prices Remain Volatile

Despite significant drop in Semi finish (Billet) prices, the raw materials - melting scrap prices remained volatile in major markets of South, West & Eastern India with minor fluctuations of INR 200-400/MT (USD 3-6) on weekly basis.

It's been observed that local scrap availability is on average basis and as per requirement the smelters/furnaces are sourcing material from nearest regions, SteelMint analysed in recent conversation with participants. Meanwhile another factor for volatility in scrap prices can be considered is lessened bulk scrap imports and regular availability of containerised scrap in specified regions. These factors have balanced India's demand of melting scrap.

Market participants are assuming that, domestic scrap prices won't decline in broad way until global scrap get narrowed down in large extent in near time frame.

However they also believe that, there is scope of minor price corrections on account of imported scrap offers of Middle East origin scrap (HMS 1 & 2) which exists at around USD 330/MT CNF India, which landed cost in India's South & Western steel mills is equivalent to INR 25,500/MT.

Whereas current trade reference melting scrap (80:20) prices in India is hovering at INR 26,200-26,400/MT FoR Ahmadabad, INR 24,800-25,000/MT Ex-Mumbai & INR 24,500-24,800/MT Chennai.

Middle East origin scrap offers generally stands higher by around USD 10-12 in comparison to Europe & West Africa due to less time consuming and better quality.