Domestic ferrous scrap prices in Mumbai and Jalna, two key markets in Maharashtra, gained on Thursday amid an uptick in demand. Overall sentiment in the Indian steel market, however, remains bearish. The ongoing monsoon season has kept the pace of construction slow, impacting demand for long steel.
In the export market, Russian sellers are offering competitive prices to sell-off inventory before the hike in export tax comes into effect. Export offers for Indian semi-finished steel have thus come under pressure declining by $20/mt fob India from two weeks ago at $600/mt fob, adding to the bearish sentiment.
The daily Davis Index for HMS 1&2 (80:20) settled up by Rs300/mt ($4.01/mt) to Rs32,000/mt ($427.85/mt) del Mumbai mill, and the index for sponge iron was at Rs29,400/mt delivered mill, also up by Rs300/mt. After almost a month of hiatus, mills booked ferrous scrap as rebar prices in the city registered an uptick. A rise in rebar demand gave ferrous scrap prices a lift.
In Jalna, the bi-weekly index for HMS 1&2 (80:20) rose by Rs1,500/mt to Rs32,500/mt delivered mill, while the index for sponge iron fell by Rs200/mt to Rs31,200/mt del mill. A severe shortage of ferrous scrap forced mills to raise bids. Scrap collection has dropped due to rains, a decline in demolition activity, and the slow pace of manufacturing. The Maharashtra government is yet to completely ease the state-wide lockdown.
Power shortage in North India has forced many mills to curtail production, which has impacted scrap and sponge iron consumption. The market, therefore, was largely silent.
In Ludhiana, the bi-weekly indexes for busheling settled at Rs36,600/mt delivered mill, down by Rs100/mt; End cutting at Rs36,300/mt delivered mill, down by Rs100/mt, while the index for sponge iron settled at Rs32,500/mt delivered mill, down by Rs450/mt del mill. In Mandi Gobindgarh, the daily index for HMS 1&2 (80:20) fell by Rs100/mt to Rs33,800/mt delivered mill, and the index for sponge iron settled unchanged at Rs32,300/mt del mill.
In Indore, the bi-weekly Davis Index for HMS 1&2 (80:20) settled unchanged from Tuesday at Rs33,500/mt delivered mill, while the index for sponge iron declined by Rs200/mt to Rs30,800/mt del mill. Most mills booked scrap only for immediate melt requirements to avoid losses amid fear of a third COVID-19 wave, expected in August. Steel demand could remain muted if infections rise substantially.
($1=Rs74.73)