India: Imported scrap trade picks up on rising sponge, billets offers

India's imported scrap market remained active this week with trade activities picking up despite a hike in offers. The price rally in sponge iron and billets have lent support to imported scrap inquiries in India.

Global ferrous scrap offers have edged up by $5/t after Turkey actively resumed bookings. In a recent deal concluded by a Turkish mill, a US-origin bulk cargo has been booked by a West Marmara region-based mill. The cargo comprising HMS 1&2 (80:20) was booked at $514/t and shredded and PNS at $534/t CFR basis. SteelMint's assessment of US-origin HMS 1 & 2 (80:20) prices is at $510-515/t CFR Turkey, up by $5/t w-o-w.

Recent deals

• In a recent deal concluded, South Africa-origin HMS 1&2 (90:10) was booked at $515/t CFR Nava Sheva basis.
  
  
• In another deal concluded, 1,000 t of Dubai-origin HMS 1 was sold at $510/t CFR Nava Sheva, Mundra basis. Fresh offers are being quoted at $515/t CFR levels.
  
  
• Meanwhile, in a deal concluded earlier this week, 2,000 t of Dubai-origin HMS 1&2 (80:20) was bought by a western India-based mill at $500/t.
  
  
• Shredded offers in containers are heard at around $550-555/t, CFR Nhava Sheva, unchanged w-o-w, but no confirmed deal was heard.
  
  

Factors supporting imported scrap bookings -

• Imported-domestic scrap price parity narrows down: Domestic scrap prices increased following the improvement in semi-finished and finished steel trades. HMS (80:20) prices moved up by INR 2,300/t to INR 40,300/t ($535/t) DAP Mumbai, as compared to the landed costs of imported Dubai-origin HMS 1&2 (80:20) which come at INR 40,000/t. Current import offers of the same stand at $505/t CFR Nhava Sheva (INR 38,000/t). Thus, the price parity between imported and domestic scrap has narrowed down. Prices in Jalna were assessed at INR 41,000/t DAP ($544/t), up by INR 2,000/t w-o-w while in some key markets, prices touched the highest levels this week.
  
  
• Indian sponge iron prices hit an all-time high: Rise in demand of sponge iron amidst surging billets prices on optimistic trends took sponge iron prices to an all-time high since SteelMint started maintaining data from Jul'12. Pellet-based DRI (P-DRI, FeM 80%) prices rose by INR 1,600/t w-o-w to INR 36,300/t ($482/t), exw-Raipur.
  
  
• Indian rebar prices move up: The domestic rebar market gathered momentum across regions. The sharp rise in prices of raw materials forced manufacturers to hike offers in the spot market. Improvement in buying inquiries and appropriate transactions were observed in most of the major markets during the week. Domestic IF-route rebar prices stand at INR 58,300/t ($774/t) exw-Mumbai, up by INR 1,800/t w-o-w.
  
  

Outlook

Market sources expect steel sentiments to remain positive which may support imported scrap bookings in India, SteelMint notes.