India: Mills active in booking imported HMS, shredded market muted

India's imported scrap trade for HMS grade remained active this week. Buyers were keen to book fresh material on rising prices and supportive domestic sentiments. However, demand for shredded material remained muted due to high offers, SteelMint learnt from sources.

Recent deals and offers

• A decent quantity of East Africa-origin HMS 1&2 (80:20) material was booked at $465/t CFR Nhava Sheva.
  
  
• A few containers of South America-origin material were booked at $480-490/t CFR Chennai levels.
  
  
• UAE-origin HMS 1&2 (80:20) was being quoted at $485-490/t CFR, up by $15/t w-o-w.
  
  

Factors supporting imported scrap prices -

• Active bookings from Turkey: Turkish steel mills booked around seven deep-sea scrap cargoes this week. Further, mills are expected to remain active going forward as they require few more cargoes for Feb'22 shipment. In a recent deal, Turkish mills booked a Benelux-origin cargo at $465/t CFR and a US-origin cargo comprising shredded at $492/t and HMS at $472/t CFR levels.
  
  
• Indian imported shredded market inactive: Indian shredded scrap importers remained inactive compared to the neighbouring Pakistan and Bangladesh. Suppliers seemed to be interested in accepting bookings at higher levels. Around 4,000 t of UK/EU-origin shredded scrap in containers was booked at $550/t CFR Qasim while fresh offers are at $555/t CFR. In another deal, 3,000 t of USA-origin shredded material was booked at $540/t CFR Qasim, sources informed. "No inquiries have been heard for shredded material for India as buyers are unwilling to pay more than $530-540/t", said a scrap trader.
  
  
• Gap between domestic, imported prices narrows: Hike in semi-finished steel prices and increased bids at recent pig iron auctions conducted by major mills resulted in the rise in domestic scrap prices. Apparently, improvement in global scrap prices also led to a rise in domestic offers. SteelMint's assessment for HMS (80:20) moved up by INR 900/t w-o-w to INR 37,300/t ($503/t) DAP Mumbai while prices in Jalna were assessed at INR 37,300/t DAP ($503/t), up INR 800/t w-o-w. The landed costs of imported HMS scrap to Mumbai come to around INR 38,000-38,300/t. The price gap between imported and domestic scrap has narrowed down to INR 1,000/t.
  
  
• Sponge iron prices rise on coal price rally: Sponge iron prices rallied on active demand amidst slight supply shortage, rising billets and coal prices. Sponge iron P-DRI (FeM 80%) prices rose by INR 1,200/t w-o-w to INR 32,400/t ($437/t) exw-Raipur.
  
  
• IF-grade rebar prices remain supported: A sharp rise in steel billets prices lent support to rebar prices and prompted suppliers to increase prices another week. Buying inquiries and transactions, however, varied across regions. Prices increased by INR 1,400/t w-o-w to INR 52,200/t ($704/t) exw-Mumbai.
  
  

Outlook: The Indian domestic market has improved now and bookings for imported scrap may pick up further in the coming week. However, the surge in daily Covid cases is a major concern and may affect the overall market situation.