Indian Scrap Importers Turn Silent Over Currency Depreciation

Plunge in domestic scrap prices by INR 600-800/MT on W-o-W basis has made steel mills to prefer it over costlier imported scrap.

In recent conversations with market participants, SteelMint learned that Indian importers have turn absolutely silent for scrap imports on the major reason of unfavorable depreciation of INR against USD making imports costlier. USD/INR exchange rate stood at 68.5 today which was trading at 67.8 a week ago.

Global scrap prices remained stable in recent deals concluded in Turkey after elections however participants are awaiting clear price trends in upcoming days and seeking for the stability of Indian Rupee against USD. Importers may perhaps continue to remain away from scrap imports for upcoming 1-2 weeks.

Price assessment of UK and USA origin containerized Shredded scrap remain stable at USD 382-385/MT, CFR. But HMS 1&2 prices have moved down by USD 5-10/MT on W-o-W basis. Offers for HMS 1&2 (80:20) from UAE stood at USD 355-360/MT and HMS 1 at USD 365-370/MT, CFR. South African HMS 1 assessed at USD 375/MT, CFR Nhava Sheva.

West African and European HMS scrap was being offered in the range of USD 340-350/MT, CFR depending on the quality of scrap in containers.

Few steel mills are working with stocks available in hand and few of them are waiting for the arrival of materials booked a few weeks earlier. The price gap between Shredded and HMS 1&2 increased further this week on a disparity between supply and demand for low-grade scrap as compared with high grade.

"Imports are costlier now on currency depreciation concerns. Local markets have corrected sharply dragging billet prices under pressure along with finish long prices. In last 3 weeks' time, domestic scrap prices also have dropped by INR 1300-1500/MT (USD 19-22) making domestic scrap more preferable over imported" shared a trade source.

Indian domestic scrap prices tumble down by INR 600-800/MT W-o-W - Amid decent availability and weakened semi-finish steel prices, domestic scrap prices in India observed downward trends in almost all major regions on the weekly comparison. Currently, HMS (80:20) basic prices assessed at INR 25,000-25,200/MT (down INR 800 W-o-W) in Mumbai, while INR 24,800-25,000/MT (down INR 600 W-o-W) in Chennai, GST @ 18% extra.

Ship breaking market witnessed steady sentiments amid several sales concluded last week in Alang region. Ship cutting prices remain stable on W-o-W basis and assessed at USD 430/LDT for general dry bulk cargo; at USD 450/LDT for containers and at USD 440/LDT for tankers on CNF India basis respectively. As per reports, a small tanker of 2,841 LDT fetched price USD 305/LDT, CNF India last week additionally, sales of 1 VLCC along with 3 large tankers have reported in the market.