India: Ferro molybdenum trends propel rise in SS 316-grade scrap prices

• Significant bid-offer disparity seen in market
  
  
• Major mills refrain from booking imported material
  
  

India's stainless steel scrap prices, both in domestic and imported markets, experienced a slight increase compared to the previous assessment on 8 May, 2024. This rise can be primarily attributed to the escalating raw material prices and price hike by a primary producer. Moreover, a significant flat producer raised finished prices of 316-grade by INR 2,000/t and for JT grade by INR 1,000/t. SS 316-grade scrap prices increased on ferro molybdenum trends.

Nickel prices for 3-month delivery on LME saw a marginal 2% rise, reaching $18,980/t, at the time of reporting. Notably, nickel stocks in LME warehouses stood at 80,004 t. In the imported segment, BigMint's assessment for stainless steel 304-grade scrap from the nearshore region rose by $35/t, reaching $1,435/t. Meanwhile, 316-grade stood at $2,580/t, up by $15/t, both CFR Mundra. Additionally, Southeast Asian suppliers were offering 304 scrap at $1,440-$1,460/t and 316-grade at $2,590-$2,600/t levels.

A trade source mentioned, "Currently, there's significant bid-offer disparity in the market, with suppliers hesitant to sell material at lower prices, leading them to withhold stock."

In the domestic scrap market, SS 304 prices held steady at INR 120,000/t, while SS 316-grade scrap prices increased by INR 2,000/t to INR 212,000/t, ex-Delhi. Sources suggest that major mills are procuring 304 scrap at approximately INR 121,000 to 122,000/t and 316 scrap at INR 213,000 to 215,000/t DAP, offering a credit period of 45 days.

Meanwhile, major mills are refraining from booking imported material and are instead concentrating on domestic sources.

A trader informed BigMint, "The market is sluggish with minimal bookings observed. Larger mill-based buyers are primary active participants in procuring scrap within the domestic market."

316-grade prices rise

The recent hikes in 316-grade prices within the finished market, are closely tied to the escalating ferro-molybdenum prices, which is a key raw material used in the making of SS 316-grade.

Indian ferro molybdenum prices rose by INR 124,000/t ($1,484/t) w-o-w in comparison to the previous assessment on 1 May. The price increase was reportedly caused by material shortages in both the domestic and international markets.

Delayed molybdenum oxide imports due to geopolitical issues restricted India's material supply. In China, weekly ferro molybdenum prices surged by RMB 10,500/t ($1,453/t) to RMB 242,500/t ($33,559/t) amid rising demand from steel mills in key provinces like Shandong, Jiangsu, Zhejiang, and Hunan.

As a result, the uptick in finished prices drove an increase in 316-grade scrap prices.

As per BigMint's assessment, 316 HRC prices stood at INR 307,000-INR 309,000/t, ex-Mumbai, moving up by around INR 2,000/t from INR 306,000/t.

In contrast, 304 finished prices have remained relatively stable, experiencing only marginal increases. However, despite price rises, the finished market is grappling with declining demand, indicating a complex market scenario.

Recent deals

Around 70 t of SS 304 scrap was heard concluded at INR 120,000/t, exw Delhi.

Around 100 t of US-origin zurik (SS 88%) was bought at $1,410/t, CFR Mundra.

A recent deal for 200 t of Thailand-origin SS 201 scrap was traded at $795/t, CFR Mundra.

Outlook

Considering current market conditions, there is an anticipation of a potential upward trajectory in scrap prices, particularly for 316-grade, in the coming days, or at least stability within the current price range.