Domestic ferrous scrap prices in India rose on Tuesday amid continued short supply. Steel prices in the domestic market increased on global cues. Large-scale mills eyed export markets where they offered billets at $700/mt fob India after previous deals at $650/mt fob. The price rise in export market also kept the domestic market bullish despite weak steel end-user demand in India.
The bi-weekly Davis Indexes for HMS 1&2 (80:20) rose by Rs1,200/mt($16.35/mt) from last Thursday to Rs36,700/mt del Ludhiana mill, busheling by Rs1,100/mt to Rs40,100/mt del mill, End cutting by Rs1,200/mt to Rs39,900/mt; while the index for sponge iron rose by Rs400/mt to Rs33,100/mt del mill.
The bi-weekly Davis Index for End cutting settled unchanged from last Thursday at Rs38,500/mt del Raipur mill; while the index for sponge iron rose by Rs1,775/mt to Rs30,775/mt del mill. Pellet sponge offers on Tuesday were at Rs31,000-31,100/mt del mill but buyers were unwilling to accept these levels and kept their bids lower by Rs500/mt at the minimum. International iron ore prices strengthened after China returned to the market after the labour day holidays. In India, market participants believe NMDC could also hike iron ore prices in keeping with the international market. As a result, sponge iron offers in the market continued to rise.
In Mumbai, scrap prices were flat with the daily Davis Index for HMS 1&2 (80:20) and sponge iron unchanged at Rs36,500/mt del Mumbai mills and Rs30,200/mt del mills, respectively.
Suppliers in Mandi reduced their offers to boost sales as demand came under pressure due to stringent lockdown measures. The daily Davis Index for HMS 1&2 (80:20) declined by Rs200/mt to Rs37800/mt del Mandi Gobindgarh but the index for Sponge iron rose by Rs700/mt to Rs33,000/mt del mills.
Mills in Chennai bought ferrous scrap only on a need basis. With the Tamil Nadu government announcing a lockdown, steelmakers are worried of inventories piling up because of a drop in sales. The bi-weekly index for HMS 1&2 (80:20) declined in Chennai by Rs300/mt to Rs34300/mt and the index for sponge iron rose by Rs800/mt to Rs30,700/mt del mills.