The Indian government announced a 21-day lockdown on the rising number of COVID-19 cases this week, disrupting imported ferrous markets. Traders tried to renegotiate their old orders and letters of credit before buyers back out. US suppliers stopped loading containers for seaborne trades with India, Pakistan and Bangladesh. Many contracts signed earlier were cancelled as participants await markets to resume smooth functioning.

Buyers have requested shipping lines to forgo demurrage and detention charges as the road transport and customs clearance process remains hampered, with no response yet. The Indian currency recovered late this week and stood at Rs75.07 against US$1 after reaching at Rs76.57 early this week.

Over the last two weeks, imported scrap prices in India have dropped by a total of over $40/mt cfr and are likely to decline further following global billet and ferrous scrap trends. Though banks continued to function, traders were unable to process documentation.

The weekly Davis Index for containerised shredded dropped by $22/mt to $258/mt cfr Nhava Sheva on Friday. Early this week, shredded in containers traded at $260-265/mt cfr Nhava Sheva. But after the lockdown announcement production at mills has come to a standstill and buying interest has disappeared from the market.

In absence of trading, the Davis Index for containerised P&S 5ft settled at $25/mt cfr Nhava Sheva, down by $20/mt from the prior week. The weekly Davis Index for busheling settled at $270/mt cfr Nhava Sheva, down by $20/mt. The weekly index for Turning scrap settled at $225/mt cfr Nhava Sheva, down by $20/mt.

Demand in the automotive and construction sectors is unlikely to improve before July or August. With a halt in finished steel demand, buyers could refrain from restocking ferrous scrap. Around 25-30pc of small-scale steel makers are on the verge of shutting their operations for good due to economic disruption and cash crunch.

Nhava Sheva

The Davis Index for UAE-origin containerised HMS 1&2 (80:20) dropped by $12/mt to $268/mt cfr Nhava Sheva on Friday with no bookings reported. Early in the week, HMS 1&2 (80:20) from South Africa was priced at $260-265/mt cfr Nhava Sheva. Sellers subsequently withdrew offers amid a lockdown declared in South Africa. The Davis Index for HMS 1&2 (80:20) from the UK and Europe settled at $248/mt cfr Nhava Sheva, down by $12/mt from last Friday.

 

Goa

Before the lockdown, bids for HMS 1&2 (80:20) from West Africa were at $235-245/mt cfr Goa, down by $15-20/mt with no trades reported.

Chennai

The Davis Index for US-origin HMS 1&2 (80:20) settled at $250/mt cfr Chennai, down by $8/mt from the prior week. The Davis Index for the UK and EU-origin HMS 1&2 (80:20) settled at $250/mt cfr Chennai, down $12/mt from the prior week. The Davis Index for Australia-origin HMS 1&2 (80:20) settled at $258/mt cfr Chennai, down by $7/mt from the prior week.

($1=Rs75.07)

Leave a Reply

Your email address will not be published.