Domestic ferrous scrap prices receded on Thursday pressured by low demand from steel manufacturers. Secondary steel makers have cut production owing to huge losses incurred due to higher conversion costs.
The daily Davis Index for HMS 1&2 (80:20) declined by Rs725/mt ($9.27/mt) to Rs33,575/mt del Mandi Gobindgarh and the index for Sponge iron settled flat at Rs32,800/mt del mills. Rumours of a 48-hour power cut in Mandi are circulating, which, however, has not been officially confirmed.
Mills in Mumbai have plans to cut production by 25pc amid low sales. The daily Davis Index for HMS 1&2 (80:20) declined by Rs500/mt to Rs33,100/mt del Mumbai mills and the index for Sponge iron declined by Rs500/mt to Rs29,100/mt del mills.
Secondary steel makers in Jalna have cut their production by 7-10pc hence ferrous scrap suppliers reduced their offers and the bi-weekly index for HMS 1&2 (80:20) declined by Rs500/mt to Rs33,000/mt del Jalna mills and the index for Sponge iron declined by Rs200/mt to Rs31,700/mt del mills.
Markets in the East also followed a similar trend with the index for HMS 1&2 (80:20) down by Rs1,100/mt to Rs34,400/mt del Durgapur mills. The index for Sponge iron settled flat at Rs28,000/mt del mills. At Durgapur, a bulk of TMT sat idle at yards with no bidders for the stock. Mills, therefore, have decided to cut finished steel production by a minimum of 25pc.
Traders remain cautious and stayed away from stocking ferrous scrap while they wait for demand from the end-users to pick up.Mills in Chennai procured scrap on a need basis due to sluggish local demand, the bi-weekly index for HMS 1&2 (80:20) declined by Rs1,500/mt to Rs33,000/mt del Chennai mills and the index for Sponge iron declined by Rs400/mt to Rs28,200/mt del mills.
($1=Rs74.5)