Availability of domestic scrap has started to decline as most mills opted for competitively priced domestic scrap over imported material for the last few weeks. The daily Davis Index for HMS 1&2 (80:20) rose by Rs350/mt ($4.80/mt) to Rs26,750/mt ($366.57/mt) del Mandi Gobindgarh mill. The index for Sponge iron settled flat at Rs24,400/mt del mill amid limited buying. On Tuesday evening, Sponge manufacturers tried to raise offers by Rs300/mt, but mills resisted these levels, forcing producers to lower offers again to clear-off inventories. Demand for finished steel continued to be under pressure.
In Mumbai, the daily Davis Index for HMS 1&2 (80:20) settled unchanged at Rs26,500/mt delivered mill. Mills looked at clearing-off their piled-up inventories as market participants believe secondary finished and semi-finished steel prices will decline further due to lack of demand. The index for Sponge iron fell by Rs250/mt to Rs24,200/mt amid muted demand. Sponge manufacturers indicated bearish sentiment.