Indian buyers are reluctant to book imported ferrous scrap as offers rose despite weak steel demand in the domestic market. Chinese steel prices dropped by $50-70/mt in the last couple of days as the government took serious steps to bring prices under control.
Offers for containerized shredded remained firm in the range of $520-525/mt cfr Nhava Sheva. The Davis Index for containerized shredded, Monday, settled at $518.75/mt cfr Nhava Sheva, unchanged from Friday. Mills, however, resisted shredded scrap bookings and turned cautious to ensure if these levels could sustain longer.
Importers operating from Kandla, Mundra, Nhava Sheva and Goa ports are also facing delays caused by cyclone Tauktae. Most states in the country have decided to extend COVID-19 related lockdowns for the rest of May, which could severely hamper economic activities.
The daily Davis Index for UAE-origin HMS 1&2 (80:20), Monday, rose to $498/mt cfr Nhava Sheva, up by $3/mt. Offers that hit a decade’s high last week remained firm. But buyers are resisting these levels and are hoping for a correction to start restocking.
Offers for HMS #1 from Dubai-origin above $505-510/mt cfr Nhava Sheva and upto $515/mt cfr Chennai on limited supply and expectations of active demand post-Eid holidays. Mills are expected to increase short transit container bookings from the UAE as pressure on Chinese steel prices and subdued domestic demand has forced them to focus on immediate melt requirements.
The index for US-origin HMS 1&2 (80:20), Monday, settled at $500/mt cfr Nhava Sheva, stable from Friday. Amid the non-availability of containers and severe logistic challenges, mills overlooked HMS offers from the UK and US yards.
In China, spot iron ore prices for 62pc Fe, remained around $210/mt cfr China. On Monday, prices showed signs of revival, despite a government warning against speculation. Most mills continue to produce steel at a record pace boosting appetite for ferrous scrap.
Spot steel prices continued to drop amid high inventories and a dip in steel futures on Monday. Billet prices fell by another CNY200/mt to CNY5,480/mt ex-Tangshan on Monday. In the export market, Chinese buying interest for billet from Southeast Asia and India is expected to be around $720-730/mt cfr China, losing as much as $80/mt from the peak of $800/mt cfr in the prior deals. Lower billet and rebar prices could consequently pressure ferrous scrap, believe traders.
Subcontinent
The daily Davis Index for containerized shredded, Monday, settled at $522.31/mt cfr Indian subcontinent, up by $0.71/mt; while that for containerized US-origin HMS 1&2 (80:20) rose to $504.79/mt cfr Indian subcontinent, up by $0.22/mt from Friday.
($1=Rs73.27)