Imported ferrous scrap trades in India resumed on Tuesday after pausing for a few days on high offers. Indian buyers have started buying HMS, albeit, in limited quantities and could resume shredded buying in the coming days, said traders. Primary steelmakers remained bullish on domestic finished steel prices.
The Davis Index for containerized shredded on Tuesday increased by $7.08/mt to settle at $425.83/mt cfr Nhava Sheva. Shredded scrap buyers were cautious but increased inquiries on Tuesday to refill their inventories.
The Davis Index for UAE-origin HMS 1&2 (80:20) remained stable on Tuesday at $403/mt cfr Nhava Sheva with active trades amid strengthening rebar and domestic scrap prices in India. Offers for containerized #1 HMS without the cast and galvanized iron from Dubai were prices above $405-410/mt cfr Nhava Sheva on Tuesday, with a buyer interested at $395-400/mt cfr Nhava Sheva. Sharp rise by Rs1,000-1,200/mt to Rs28,750/mt del Chennai for domestic HMS 1&2 (80:20) in a single day lifted enquiries for imported scrap again.
Flat steel producers are well-placed in the Indian market compared to long steel producers who are still struggling. In North India, buyers stayed away from the market as farmers’ protests disrupted transportation of material in the region.
Market participants have ruled out the possibility that a correction in iron ore prices could impact ferrous scrap markets. Rather Indian buyers have shed their resistance and have accepted higher offers this week. Supply is still very limited, and yards remain bullish amid strengthening demand in Turkey ahead of the winter break from December 20-22. Traders believe the Turkish shredded prices in bulk have headroom for another $10-15/mt rise, which could further lift South Asian prices.
The Davis Index for US-origin HMS 1&2 (80:20) settled at $404.29/mt cfr Nhava Sheva on Tuesday, up by $3.04/mt from Monday. Offers for the grade in containers at $405-408/mt cfr Nhava Sheva against bids of upto $390-395/mt cfr Nhava Sheva. Suppliers from South Africa and West Africa stayed away from the market due to permit issues and low collection rates.
A stronger billet export market could support scrap imports in India. The rise in input cost pushed billet export prices up with some Southeast Asian mills targeting $530/mt fob prices. Offers in China and Southeast Asia above $550-560/mt cfr Southeast Asia on Tuesday.
The Davis Index for containerized shredded, Tuesday, settled at $425.29/mt cfr India subcontinent, up by $5.92/mt from Monday. The Davis Index for containerized US-origin HMS 1&2 (80:20) rose to $404.23/mt cfr India subcontinent up by $2.81/mt from Monday. Freight rates on the New York to South Asian route are expected to move up amid acute container shortage which could curtail trades.