A downtrend in domestic billet and rebar prices in India for the last two days weighed down importers’ bids on Thursday. Most buyers have decided to hold off purchases hoping for a drop in the global ferrous scrap prices on the back of Turkey market softening.
In the bulk market, offers for HMS 1&2(80:20) were in the range $295-305/mt cfr Kandla, however, no trades were reported.
The daily Davis Index for containerized shredded Thursday settled at $308/mt cfr Nhava Sheva, down by $2.88/mt. Though offers for UK-origin containerized shredded were at $312-315/mt cfr Nhava Sheva and Mundra, no buyers were interested at those levels. Bids on Thursday reported at $305/mt cfr against offers of $312-315/mt cfr Nhava Sheva.
The Davis Index for HMS 1&2 (80:20) of UAE-origin settled at $297.5/mt cfr Nhava Sheva, down by $2.5/mt from Wednesday. Early in the week, deals for Dubai-origin material were at $295-298/mt cfr Nhava Sheva, however, bids on Thursday dropped to $290-295/mt cfr Nhava Sheva. Buyers preferred UAE-origin materials for its shorter delivery period compared to that of the UK or the US.
Many trades for HMS 1&2 (80:20) from Australia and Brazil were reported in the range of $285-295/mt cfr Nhava Sheva depending on quality, down $5/mt from early this week.
The index for US-origin HMS 1&2 (80:20) settled at $294/mt cfr Nhava Sheva, down by $2.25/mt from Wednesday. US suppliers, however, refused to lower offers amid expectations of strong global demand. Offers for US-origin HMS 1&2 (80:20) were at $295/mt cfr Nhava Sheva on Wednesday, with bids at $285-290mt cfr Nhava Sheva.
A few buyers opted for domestic scrap and sponge iron over imported scrap. Most steel traders have reported around 60pc drop in their monthly sale volumes and are facing cash constraints.
Steelmakers in Gujarat have enough inventories to fulfill their next month’s requirements. These mills want to avoid stockpiling amid demand uncertainty since the COVID-19 outbreak is not totally under control.
After the rains start their withdrawal, a government boost for construction and infrastructure sectors could, however, spur demand. Additionally, should the government agree to secondary steelmakers’ suggestions and restrict steel imports and hike duties, the domestic steel industry could benefit.
($1=Rs75.13)