India: Ferrous scrap prices rise INR 500/t w-o-w in Chennai - 7 Nov'24

Chennai's HMS (80:20) scrap prices edged up by INR 100/t to INR 32,300/t on a d-o-d basis, reflecting a weekly rise of INR 500/t, as per BigMint's latest assessment. Meanwhile, billet prices increased by INR 500/t to INR 42,800/t. Rebar prices saw a modest increase of INR 200/t, reaching INR 47,200/t. However, trade activity in the market remains moderate as buyers and suppliers proceed with caution despite the upward trend in prices.

Imported, domestic market trends

"The market in southern India has slowed down after Deepawali," said a scrap trader. "Shredded scrap from the UK/EU is currently priced around $390-395/t CFR Chennai, while HMS (80:20) from Australia and West Africa is offered at $370-375/t CFR." He also mentioned, "A recent deal involved 200t of LMS grade material at $350/t."

Another market insider noted that prices for Australian HMS 20t loading heard at $370-372/t for Chennai/Nhava Sheva, European shredded at $390-395/t, NTP at $400-410/t, bushelling at $415-425/t, and Turnings at $360-365/t.

Domestically, buyers' bids for HMS 80:20 ranged between 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 ranged over INR 32,000-33,000/t. Despite the gap between buyer and supplier expectations, most trades occurred within the range of INR 32,000-32,500/t, reflecting cautious but stable market participation.

Buyer-supplier sentiments

A mill representative informed BigMint that finished steel trades have slowed down following last week's Deepawali festival. This decline in trade has been further impacted by continuous rains since last night, affecting both semi-finished and finished steel markets. However, the mill reports that scrap arrivals are currently sufficient to meet their production requirements.

According to a scrap supplier, "Scrap prices are steady at INR 32,000-33,000/t, and with the monsoon season in full swing in Chennai, the finished steel market is expected to experience slower movement. This will likely result in range-bound pricing and demand for scrap in the days ahead."

Regional comparison

In the Jalna market, billet and rebar prices remained stable at INR 41,800/t and INR 47,100/t, respectively. While HMS 80:20 scrap prices inched up by INR 100/t to INR 33,200/t. Sources indicate that trade activity in rebar was moderate today, while the mills reported having adequate scrap supply as per their operational requirements.

Outlook

With the rainy season already underway in the region, the demand for steel materials has noticeably slowed down. Despite the slowdown, steel prices are expected to stay within a range, with possible variations of INR +/- 500/t anticipated in the near future, based on current market conditions.