Indian domestic ferrous scrap prices declined on Wednesday amid low demand for finished steel. Mills refrained from buying more scrap as they have stocked enough inventories to support production till monsoon recedes. Post-monsoon, steel demand from the construction sector is expected to return and spur demand for scrap.
The daily Davis Index for HMS 1&2 (80:20) fell by Rs200/mt ($2.71/mt) to Rs24,200/mt del Mumbai mills. Sponge prices rose amid an increase in input cost and low iron ore output from mines. The index for Sponge iron rose by Rs100/mt to Rs20,400/mt del Mumbai mills, few trades were heard at the index price.
Markets in the North behaved in a similar manner, the daily Davis Index for HMS 1&2 (80:20) declined by Rs300/mt to Rs22,500/mt del Mandi Gobindgarh and the index for Sponge iron rose by Rs100/mt to Rs22,900/mt del Mandi Gobindgarh.
Traders expect higher scrap prices to sustain in the near term and spike once demand from the construction sector picks up.
Import prices for HMS 1&2 (80:20) which were rising for the past two weeks are now firm at $306/mt cfr India. Mills have to import scrap in the near term as domestic availability is low in India.