India: Imported scrap trade supported despite price rally, outlook optimistic

India's imported scrap market has continued to remain active this week, despite witnessing a price rally tracking global movement on the back of supply concerns from CIS nations. Global ferrous scrap offers hit an all-time high after a recently concluded Turkish deal. SteelMint's assessment of US-origin HMS 1 & 2 (80:20) prices is at $585-590/t CFR Turkey, hitting a multi-year high.

Recent deals

• Fresh offers for Dubai-origin HMS 1&2 (80:20) in containers are at $550/t CFR Nhava Sheva, witnessing a hike of around $40-50/t w-o-w. However, deal details remained unconfirmed.
  
  
• HMS1 from the same origin is quoted at $560/t CFR levels.
  
  
• Earlier this week, 1,000 t of HMS-1 deals in containers from the UAE were heard at $540/t CFR Nhava Sheva and around 500 t were booked at $535/t CFR Mundra basis.
  
  
• Shredded offers in containers were heard at around $595-600/t, CFR Nhava Sheva, moving up significantly, but no confirmed deal was heard.
  
  

Factors driving scrap prices-

• Price parity with domestic scrap: Domestic scrap prices in India hit an all-time high this week on bullish sentiments in iron ore and scrap markets. Meanwhile, increasing domestic scrap prices have made imports favourable, especially for HMS cargoes, SteelMint understands. HMS (80:20) prices moved up by INR 3,700/t w-o-w to INR 44,000/t ($577/t) DAP Mumbai. On the other hand, the landed costs of imported Dubai-origin HMS 1&2 (80:20) stand at INR 44,000-44,400/t. India's imported scrap trade gradually resumed after domestic substitute prices increased.
  
  
• Sponge iron prices hit a new high: Sponge prices are edging higher on active demand and firm coal and billets prices. Prices are expected to remain strong in the near-term. Pellet-based DRI (P-DRI, FeM 80%) prices rose by INR 5,500/t w-o-w to INR 41,800/t ($548/t) exw-Raipur.
  
  
• Rebar prices up further: A consistent surge in sponge iron and steel billets prices forced manufacturers to hike rebar offers. However, demand varied across regions. Currently, traders and retailers are cautious to procure the material at high prices although the sentiments remain supported. Domestic IF-route rebar prices stand at INR 67,500/t ($886/t) exw-Mumbai, up by INR 9,200/t w-o-w.
  
  

Outlook

Imported scrap inquiries are likely to remain supported as few participants expect that the uptrend in domestic prices will continue in the next week too. However, some buyers seem to have adopted a cautious approach in placing newer bookings.