India: Imported scrap trade picks up slightly as offers fall

The global downtrend had put Indian imported scrap prices under pressure. As prices went down, imported scrap trade picked up slightly w-o-w. However, limited deals were heard to have been concluded at a lower price while inquiries were slightly better compared to those seen in the past couple of weeks.

"Buyers are preferring to book high-seas cargoes due to volatility in imported scrap prices," said a prominent scrap trader. However, these cargoes may take time to deliver and till the time they arrive, the market price might change, he added.

Recent deals and offers

• In a fresh deal, a major steel mill has booked 700 tonnes (t) of shredded scrap in containers from the US at $540/t CFR Mundra basis. The cargo was booked for late-Jan'21 shipments.
  
  
• Fresh offers for UK-origin shredded are being quoted at $545-550/t CFR levels, down by $5/t w-o-w.
  
  
• Another deal for around 3000 t of HMS (auto parts) was heard to have been concluded by the western India based units. However, the deal price could not be confirmed till the time of publishing this report.
  
  
• UAE-origin HMS 1 in containers is being offered at $470-475/t CFR Nhava Sheva.
  
  

Frequent changes in freight rates and container availability issues kept away buyers from the market. Furthermore, negative sentiments in the domestic market slowed down trading activities.

Market highlights

• Imported scrap prices range-bound in latest deals: A US-origin cargo containing 22,000 t of HMS 1&2 (80:20) and 8,000 t of shredded scrap was booked at an average price of $476/t CFR Turkey by a West Marmara-based steel mill, SteelMint learnt from sources. Prices fell by $2-3/t on a d-o-d basis, as mills were holding back bookings on bearish finished steel sentiments.
  
  
• Domestic vs imported scrap price spread narrows: Prices in the domestic market remained volatile while trade activities regained momentum in the major markets following an improvement in semi-finished steel prices amidst healthy finished steel transactions. Meanwhile, in the some other regions, prices remained unchanged on usual procurement. Prices may see a slight fluctuation in the short term, sources said.

  SteelMint's assessment for HMS (80:20) was recorded at INR 35,600/t ($470/t) DAP Mumbai, a decline of INR 100/t ($1/t), while prices in Jalna were assessed at INR 35,000/t DAP ($462/t), down by INR 500/t ($7/t) w-o-w.

  After the slight correction in imported scrap prices, offers for UAE-origin HMS 1&2 (80:20) are now being floated at $465-470/t CFR, down by $5/t w-o-w. The landed costs of imported scrap to Mumbai come to around INR 37,000/t. The price gap between imported and domestic scrap has narrowed down to INR 1,500/t this week against INR 2,000/t assessed last week.
  
  

• Sponge iron prices rise by INR 600/t: Although limited trade was reported throughout the week due to sufficient stock in hand, sponge iron P-DRI (FeM 80%) prices rose by INR 600/t w-o-w to INR 27,700/t exw-Raipur backed by hike in pellet offers.

  P-DRI deals were confirmed at INR 28,000-28,200/t exw-Raipur, up by INR 600/t w-o-w.
  
  

• Rebar enquiries improve w-o-w: Manufacturers witnessed moderate future bookings. Trade and transactions improved in the spot market on a w-o-w basis alongside positive sentiments in semi-finished steel market which supported rebar prices on a d-o-d basis. Prices were assessed at INR 49,300/t ($651/t), up by INR 700/t ($9/t) w-o-w, exw-Mumbai.
  
  

Outlook

Indian imported scrap trade is likely to gain momentum next week given the improved sentiments in finished steel market.