India: Ferrous scrap prices remain stable w-o-w in Chennai - 10 Oct

According to BigMint's latest assessment, HMS (80:20) scrap prices in Chennai are steady at INR 32,300/t, with no variation on a daily or weekly basis. Prices for billet and rebar have also held firm at INR 45,000/t and INR 48,500/t, respectively. The impending Ayudha Pooja and Vijayadashami festivals have resulted in subdued trading activity, keeping the market quiet today.

Imported, domestic market trends

Current indicatives for HMS (80:20) scrap from the US and the UK/Europe are approximately $380-385/t CFR Chennai, with shredded scrap offers at $398-405/t. Australian HMS 1 is being offered at around $382-388/t, Busheling scrap offered at $406-412/t and HMS(80:20) offered at $378-384/t CFR Chennai.

Market participants are expecting a slowdown during the festive season although global sentiment is rising. Buying activity has been poor recently due to inclement weather and slowdown observed in many regions.

Domestically, buyers' bids for HMS 80:20 stood at INR 32,000-32,500/t for payment terms within seven days. For extended payment periods beyond seven days, prices increased to INR 32,500-33,000/t. On the supply side, offers were at INR 32,000-33,000/t. Most trades occurred within the same range.

Buyer-supplier sentiments

A mill owner said, "Trade activities for rebar have been decent in recent days. However, with the onset of rains at night and the approaching festivals, we expect trade to slow down this week. The good news is that scrap arrivals remain steady, and we have sufficient material to keep the mills running."

A mill representative informed BigMint, "The flow of scrap remains consistent with our needs during the Ayudha Pooja festival in Chennai. We are receiving what is required, but unlike before, the extra material that was previously arriving is now missing."

A scrap supplier noted, "HMS 80:20 prices are remained stable currently, prices are hovering around INR 32,000-32,500/t. The restricted supply of scrap has helped avoid a deeper price cut. However, several industry players are hesitant to buy at these prices, citing a lack of improvement in demand for finished products."

Regional comparison

In the Jalna market, HMS 80:20 scrap prices fell by INR 400/t to INR 33,300/t, with billet prices declining by INR 600/t to INR 44,200/t and rebar prices dropping by INR 500/t to INR 49,500/t. Demand for finished steel was limited during today's trading session, but mills reported a good supply of scrap. Mill owners, who had secured material at higher rates earlier, are now adjusting their offers downward for further scrap purchases.

Outlook

Chennai's market remains stable in terms of pricing, though the onset of the rainy season is causing a dampening of buyer interest in finished steel. While market activity is expected to slow down due to the weather conditions, prices are projected to stay steady without any significant drops.