Domestic ferrous scrap prices in India softened on Wednesday amid a lack of trades. The fall in prices, however, may not last long believe many mills.
The daily Davis Index for HMS 1&2 (80:20) declined by Rs500/mt ($6.68/mt) to Rs22,700/mt ($303.37/mt) del Mandi Gobindgarh mill and the index for sponge iron slid by Rs1,000/mt to Rs22,000/mt del mill. A distributor informed Davis Index, many mills are mulling raising finished steel prices to pass on the hike in input cost to consumers. But considering weak finished steel demand, traders are unlikely to buy more stock, especially at those raised prices.
In Mumbai, the daily index for HMS 1&2 (80:20) declined by Rs200/mt to Rs23,800/mt delivered mill and the index for sponge iron slid by Rs250/mt to Rs21,500/mt del mill. Construction activity in the city remains slow due to heavy rain. But, bullish imported scrap prices have kept prices from plummeting.
Most mills are now pinning their hopes on the housing projects supported by government schemes. Construction projects under the scheme are expected to consume 15.8mn mt of steel at the minimum. Additionally, the call for self-reliance, especially in the manufacturing sector, could also give an impetus to metal consumption.