India: Imported scrap trade remains slow despite drop in offers

India's imported scrap market remained quiet for yet another week. The fall in domestic prices led to a slowdown in trade for imported scrap. Other neighbouring countries like Pakistan and Bangladesh witnessed some trade. However, active bookings remained slow amidst the ongoing Ramadan month.

"This month is likely to be slow, as limited activities happen. The market may clear after Ramadan as Pakistan and Bangladesh are quiet," said a market source.

Fresh offers for UK-origin shredded in containers are being quoted at $660/t CFR Nhava Sheva levels, unchanged w-o-w. UAE-origin HMS 1&2 in containers is being quoted at $555/t CFR, down significantly by $20/t CFR w-o-w.

Buyers are mainly looking for short sea distances like Yemen, West Africa and Mauritius, as the comparatively lower offers and the short delivery period are the priorities now rather than origins.

• Mills prefer domestic substitutes: Prices declined in the northern market as well as western region following a correction in semi-finished steel prices amidst poor offtake in finished steel. SteelMint's assessment for HMS (80:20) was at INR 42,500/t ($560/t) DAP Mumbai, down by INR 900/t w-o-w, while the prices have come down considerably from INR 46,600/t was recorded a month ago. Prices in Jalna were assessed at INR 43,600/t DAP ($574/t), down by INR 400/t w-o-w.
  
  

Hence, mills prefer domestic prices at present as the landed cost of imported is comparatively high now. The landed cost of imported Dubai-origin HMS stands higher by around INR 1,500/t than domestic prices.

"Mills already restocked the material when the offers were down in the domestic market and now they are booking only hand-to-mouth," SteelMint learnt.

• Sponge iron prices drop significantly: SteelMint's assessment for sponge P-DRI (FeM 80%) fell by INR 2,200/t to INR 36,000/t ($475) exw-Raipur. The prices fell as coal prices declined amidst improved inventories in the last couple of days, although a slight hike in coal prices today resulted in improved trades.
  
  
• Secondary rebar market shows bearish trend: The domestic induction furnace rebar market saw low buying inquiries and prices corrected to INR 1,700/t. The subdued trading activity in the spot market created selling pressure which forced manufacturers to decrease rebar prices, SteelMint learned. Domestic IF rebar (Fe 500) prices stand at INR 61,800/t ($815/t) from INR 63,500/t ($837/t) exw-Mumbai.