As most market participants expected, prices in most domestic ferrous scrap markets rose on Tuesday. With expectations of recovery in steel demand, mills are gradually ramping up production. Though the availability of scrap has improved, demand is surpassing the pace of generation, resulting in firm prices.
Amongst the daily priced markets, the Davis Index for HMS 1&2 (80:20) rose by Rs700/mt ($9.40/mt) to Rs25,000/mt ($335.72/mt) del Mandi Gobindgarh mill, and the index for Sponge iron increased by Rs2,200/mt to Rs27,200/mt del mill. In Mumbai, Davis Index for HMS 1&2 (80:20) declined by Rs300/mt from the prior Thursday to Rs25,200/mt delivered mill, while the index for Sponge iron increased by Rs600/mt to Rs24,400/mt del mill. The decline, however, is unlikely to last in the coming days.
In Indore, the bi-weekly Davis Index for HMS 1&2 (80:20) rose by Rs100/mt to Rs26,800/mt delivered mill, while the index for Sponge iron jumped up by Rs300/mt to Rs26,000/mt del mill. As anticipated by mills, steel demand has shown an uptrend with a bearing on raw material prices.
In other markets, the bi-weekly Davis Index for HMS 1&2 (80:20) rose by Rs550/mt to Rs25,350/mt del Jaipur mill, while the index for Sponge iron jumped up by Rs2,250/mt to Rs27,750/mt del mill. In Ludhiana, the bi-weekly Davis Index for HMS 1&2 (80:20) rose by Rs1,200/mt to Rs26,450/mt delivered mill, while the index for Sponge iron jumped up by Rs2,300/mt to Rs28,650/mt del mill.
In the past few months, the output of iron ore has dwindled by an estimated 50pc. The steep drop, along with bullish iron ore prices in the global market for the past few months, has had a bearing on input costs for pellet Sponge producers. But at raised prices, most mills are facing difficulties in sales. The bi-weekly index for Sponge iron surged Rs2,300/mt to Rs25,500/mt del Raipur mill as the shortage of Sponge iron persists. The index for HMS 1&2 (80:20) rose by Rs750/mt to Rs27,800/mt del Raipur mill.
($1=Rs74.46)