India: Domestic stainless steel scrap prices dip w-o-w on muted finished demand ahead of year-end

• 3-month LME nickel prices gain by 1% w-o-w
  
  
• Imported scrap tags stable despite nickel rise
  
  

India's domestic stainless steel scrap prices saw a slight drop in week 50 of CY'24. Meanwhile, imported scrap prices remained stable despite an increase in LME nickel levels. Overall demand remained subdued amid the approaching year-end.

As per BigMint's assessment, domestic stainless steel 304-grade scrap stood at INR 120,500/t ex-Delhi, while the imported variant of the same, originating from the nearshore region, was priced at $1,380/t CFR Mundra.

Domestic stainless steel 316-grade scrap marginally dropped by INR 500/tonne (t) to INR 220,500/t ex-Delhi-NCR on cash payment terms.

Buying interest for both domestic and imported scrap remained sluggish due to reduced demand in the finished products segment.

Amid the evolving dynamics of India's steel imports, BigMint organised a webinar featuring Dr. Aruna Sharma, a Practitioner Development Economist and the retired Secretary of Steel, Government of India, on the very pertinent topic of "Safeguarding Indian steel industry: Are tariff barriers enough?" on 12 December.

Recently, the Indian government has been mulling an imminent safeguard duty of 25% on certain steel imports against the backdrop of growing global protectionism. The proposal was mooted at a joint meeting of the ministries of steel and commerce, where top officials from tier-1 mills such as SAIL, JSW Steel, Tata Steel, and AM/NS India were also present.

At this webinar, as one of the key takeaway, Sharma highlighted that the safeguard duty will apply mainly to stainless steel flats and hot rolled coils. While the duty could apply to other products, these two categories will be the main focus.

LME nickel prices

At the time of reporting, three-month LME nickel prices stood at $16,200/tonne (t), gaining by 1% from the previous week's $16,080/t. Meanwhile, nickel stocks in LME-registered warehouses fell by 1% to 163,644 t from 165,384 t the week before.

Market insights

Sources informed that major mills are buying 304 scrap at around INR 123,000-125,000/t, while 316 scrap was priced at INR 221,000-223,000/t, delivered (DAP), with a credit period of 30-45 days.

A trader stated, "Stainless steel scrap demand remains slow due to weak finished demand. As the year-end approaches, demand typically drops, but the market expects improvement during January-February."

As per BigMint's assessment, prices of imported 316-grade stainless steel scrap were stable w-o-w at $2,575/t, with suppliers offering material at $2,600-$2,620/t. Buyers' bids were at approximately $2,550-$2,570/t. Additionally, the 430 grade stood at $620/t and the 201 variant at $730/t CFR Mundra.

A mill source mentioned, "Imported offers are on the higher side right now, and given the current market situation, there's no interest in booking material at these prices. Prices are expected to decline in the coming weeks, so buying will likely start once they become more favourable."

Major mills have paused purchasing imports and are focusing on small volumes of domestic material instead, as per requirement. Mills are aiming to procure imported 304 at $1,350-$1,370/t. Additionally, the export market is set to enter the winter holiday mode, starting, say, 15 December, and will resume after the New Year. This break is expected to further reduce buying activity for imported material.

Outlook

In the near term, prices are expected to undergo a minor correction, as demand typically weakens towards the year-end. Market participants expect a pick-up in demand after January 2025.