India: Ferrous scrap prices remain stable w-o-w in Chennai - 21 Nov

• Tight domestic scrap supply supports prices
  
  
• Imported offers higher than domestic scrap
  
  

According to BigMint's latest assessment, HMS (80:20) scrap prices in Chennai remained stable at INR 32,300/tonne (t), with no changes observed on a d-o-d or w-o-w basis. Billet prices were steady d-o-d at INR 41,800/t but declined by INR 700/t w-o-w. Rebar prices held firm d-o-d at INR 46,300/t.

Despite subdued demand for finished steel, limited availability of domestic material and elevated offers for imports have kept scrap prices stable.

Imported, domestic market trends

With Indian demand already weak, the downturn in Turkiye has added further pressure. Suppliers are feeling the strain but have struggled to reduce prices due to high collection and buying costs. According to a UK-based supplier, market trends suggest that even though it is restocking season in Asia, buyers are likely to quote even lower levels.

Shredded from Europe was being offered at around $388-390/t, with workable prices around $385/t CFR Chennai, while Australian HMS 1 saw some traction at around $370/t.

"The downtrend in Turkiye will adversely impact the Asian market, and European scrap is expected to flow into India and Pakistan now. However, higher freights are providing some support," a south India-based trader said.

The outlook remains uncertain, and even yard owners are unsure how to boost sales in the current market.

In the domestic market, buyers placed bids for HMS 80:20 at INR 32,000-32,500/t for payments within seven days. For extended payment terms, prices increased slightly to INR 32,500-33,000/t. Offers remained within this range, with most trades finalising around these levels.

Market participants are maintaining a cautious approach, aligning bids with liquidity conditions and payment timelines.

Buyer-supplier sentiments

A mill representative told BigMint, "Finished steel demand remains subdued due to the ongoing rainy season, with buyers refraining from bulk purchases and engaging only in need-based procurement. However, demand from project-based requirements is observed to be at a moderate level."

A scrap supplier noted, "HMS 80:20 prices are stable, hovering at around INR 32,000-32,500/t. Imported offers continue to be priced higher than domestic scrap, which discourages bulk buying. Meanwhile, the restricted supply of domestic scrap is sustaining current price levels, limiting the ability of buyers to lower their scrap purchase prices in the short term."

Regional comparison

In the Jalna market, western India, billet prices increased by INR 400/t d-o-d to INR 41,900/t, while rebar prices rose by INR 900/t d-o-d to INR 47,000/t. On the other hand, HMS 80:20 prices remained stable d-o-d at INR 33,000/t.

Mills have raised rebar offer prices to maintain conversion costs, despite moderate demand for rebar. Additionally, the ongoing local assembly elections in Maharashtra have led to a liquidity crunch, further impacting market activity.

Outlook

Market sources suggest that scrap prices are expected to remain range-bound, with a potential dip of around INR 500/t in the coming days. This trend is driven by the ongoing decline in semi-finished and finished steel prices, which is exerting downward pressure on scrap values.