Indian domestic ferrous scrap prices maintained an uptrend for yet another day on Thursday. After primary mills raised finished steel prices, market sentiment remains positive in most places. In some places, however, firm prices were not met with enough steel demand.
In Ludhiana for instance, the bi-weekly index for HMS 1&2 (80:20) rose by Rs350/mt ($4.71/mt) from Tuesday to Rs26,000/mt
($350.52/mt) and the index for Sponge iron increased by Rs450/mt to Rs25,900/mt del mill. This, despite finished steel prices coming under pressure for the past couple of days. A trader, however, states a decline in prices seems to be a possibility with offers sliding by over Rs500/mt in the coming days, should finished steel sales remain under pressure.
Meanwhile, the farmers’ protests continued in Punjab over the Farm Bill and the resulting rail and road blockades have paralyzed the transport system. Davis Index sources, however, suggest these blockades could open within a day following which, logistics would return to normal. The index for HMS 1&2 (80:20) increased by Rs600/mt to Rs24,700/mt del Mandi Gobindgarh mill, due to low availability and the index for Sponge iron rose by Rs300/mt Rs24,800/mt del mill.
Among other daily priced markets, the Davis Index for HMS rose by Rs1,000/mt to Rs26,000/mt del Mumbai due to a shortage of scrap and a rise in construction steel demand, while the index for Sponge rose by Rs200/mt to Rs23,150/mt.
The bi-weekly index for HMS 1&2 (80:20) jumped by Rs1,700/mt to Rs26,200/mt del Jalna mill amid healthy demand for rebar. Mills preferred to stock material ahead of Diwali. The index for Sponge rose by Rs550/mt to Rs 22,750/mt del mill.
In South India, demand for finished steel remained weak, but raw material prices rose in line with other markets. The index for Sponge iron increased by Rs200/mt to Rs22,300/mt del Chennai. The index for HMS 1&2 (80:20) rose by Rs500/mt to Rs24,500/mt del Chennai on Thursday.
For the past month, Sponge iron prices have been gathering steam due to a shortage of iron ore. After the rainy season, mining operations are yet to return to normal levels. But mills suggest by mid-December, the situation is likely to turn around.