India: Ferrous scrap prices rise INR 500/t w-o-w in Chennai - 3 Oct

• Demand for semis, finished steel rises
  
  
• Scrap availability remains limited
  
  

Chennai's HMS (80:20) scrap prices edged up by INR 100/t d-o-d to INR 32,300/t while showing a weekly improvement of INR 500/t, according to BigMint's latest assessment. Billet prices jumped by INR 500/t to INR 44,500/t, and rebar prices increased by INR 400/t to INR 48,200/t. Today's trading session saw active trade inquiries for both semi-finished and finished steel, indicating a growing interest from buyers in the market.

Imported, domestic market trends

Current offers for HMS 80:20 scrap from the US and the UK/Europe are approximately $390/t CFR Chennai, with shredded scrap offers at $410/t. Australian HMS 1 is being offered at around $395-400/t. Suppliers have increased their quotes, driven by bullish global sentiments, but buyers have shown minimal interest in these higher prices, though some inquiries were heard today to test suppliers' responses. A couple of days back, a deal of around 500 t of NTP scrap from the UK was heard closed at $405/t, but today's offers have risen to around $415-420/t amid ongoing upward pressure on prices.

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

According to a mill owner, "Even though the rainy season is approaching, the demand for semi-finished and finished steel has increased in the region, driven by active trade in key steel markets across India. Steel prices are likely to remain stable or rise slightly in the short term, given the current domestic scrap shortage. Although some mills have booked imported scrap, it will take time for deliveries to arrive."

A scrap supplier noted, "The scrap market in Chennai is facing a curious situation. Despite high demand and an uptick in billet prices, scrap remains relatively underpriced. This disparity is partly due to a lack of scrap in the market, creating pressure for future price hikes. Traders believe that the current firmness in prices is likely to persist and even increase, especially as the availability of scrap remains constrained. The geopolitical situation, such as the Iran conflict, could influence market players to temporarily hold off from trades, but with limited scrap in circulation, prices are projected to rise in the near term."

Regional comparison

In the Jalna market of western India, HMS 80:20 grade scrap prices rose by INR 100/t to INR 33,400/t. According to industry sources, finished steel demand has picked up over the past two weeks, with many mills already securing rebar orders until the middle of the month. The arrival of domestic scrap remains steady, and several mills have secured substantial quantities of imported scrap, which has already begun arriving at the mills. Meanwhile, in the central India-based Raipur market, prices of the same grade of material increased by INR 350/t to INR 35,850/t.

Outlook

Scrap prices are projected to remain strong in the near future, driven by the persistent shortage of domestic scrap and higher offers from overseas suppliers. The recent US port labour strike has contributed to rising global supply chain disruptions, which are expected to keep scrap prices steady or even push them higher in the coming weeks.