Indian steel mills continued active inquiries and trades for imported scrap. Prices maintained an uptrend for the third successive week as they hit a 16-month high this week. Firm demand from downstream industries and a faster-than-expected recovery in India’s steel sector is likely to continue for the next few months.
The Davis Index for containerized shredded on Friday settled at $329.5/mt cfr Nhava Sheva, up by $0.92/mt from Thursday, while up $8.17/mt from the prior Friday. Trades in containers reported at $327-330/mt cfr Nhava Sheva. Major stainless steelmakers and alloy makers are restocking materials despite high prices, however, scrap demand from secondary steel mills remained weak. Offers for imported scrap jumped to $330-335/mt cfr Nhava Sheva on Friday with indications of a possibility to rise $10-15/mt post-Diwali holiday driven by sustained demand.
In Turkey, the daily Davis Index for US-origin HMS 1&2 (80:20) Friday rose by $2.5/mt to $295.5/mt cfr Turkey from the prior week. Several deals were reported in the bulk market as supplies tightened while buyers rushed to restock ahead of further price hikes. This has also led to exporters increasing asking prices in South Asia. Indian traders, however, believe bookings could slow next week due to the Diwali festival. Post which, the uptrend is likely to continue further.
Fewer HMS offers
Indian ferrous scrap importers prefer HMS scrap due to shorter delivery periods. Despite supplies from different regions, there is a shortage of offers in the market. Many South African HMS suppliers are still not able to export due to permit issues and only a few yards are operating in West Africa. Australian suppliers prefer to sell to Bangladesh. Indian buyers avoid US and UK-origin HMS materials on quality concerns and due to longer delivery period.
This week suppliers from the UAE preferred Indian buyers over Pakistan. The daily Davis Index for UAE-origin HMS 1&2 (80:20), Friday was flat at $318/mt cfr Nhava Sheva from Thursday with few deals by Jalna-based EAF makers heard at $315-318/mt cfr Nhava Sheva. Offers for containerized #1 HMS without the cast and galvanized iron from Dubai were above $320-322/mt cfr Nhava Sheva, up $8/mt from the prior week.
The Davis Index for US-origin HMS 1&2 (80:20) was at $319.5/mt cfr Nhava Sheva on Friday, up $8.07/mt from a week earlier. Suppliers are offering bulk cargoes of HMS 1&2 (80:20) at $325-330/mt cfr Kandla, but buyers showed limited interest at these price levels. Bulk demand could recover for January shipments post Diwali and the prices could reach $350/mt cfr Nhava Sheva.
In the steel export market, Indian mills are expecting bids of $445-450/mt fob, up $10-15/mt from the prior week. However, buyers are offering upto $455-460/mt cfr SE Asia. Recovery in the export market, especially in China where domestic billet has hit a 15-month high of CNY3510/mt ex-Tangshan, is expected to keep sentiments positive next week.
In northern India, many importers are still waiting for the normalization of rail services to get their containers delivered. Few mills opted for domestic scraps as a stopgap measure, but volumes remain limited. Mills have urged the state governments to resume rail services on the Mundra port to Punjab route. Also, the Punjab government has warned producers to brace for massive power cuts as the last operating thermal power plant has shut due to a short supply of coal.
There were hardly any offers for Turning scrap. The weekly index for Turning scrap rose to $288/mt cfr Nhava Sheva, up $3/mt from the prior week. Busheling traded at $335-340/mt cfr Nhava Sheva, while P&S scrap traded at $330/mt cfr Nhava Sheva in thin quantities with the index rising $5/mt from prior Friday.
Limited container availability caused by a mismatch between imports and exports has pushed freight prices up for a few routes in
South Asia. The Davis Index for containerized shredded, Friday, settled at $327.5/mt cfr India subcontinent, up by $0.94/mt from Thursday and over $7/mt from a week earlier. The Davis Index for containerized US-origin HMS 1&2 (80:20) settled at $316.82/mt cfr India subcontinent, up by $1.02/mt from Thursday.
Market update – Taiwan
Taiwanese adopted a cautious approach before booking material this week as offers increased. A few deals were heard at $285-288/mt cfr early this week, and $290/mt cfr on Friday. Offers prices of $295/mt cfr were also present in the market late Friday. The Davis Index for containerized US-origin HMS 1&2 (80:20), Friday, rose by $2/mt to $289/mt cfr Taiwan. Prices of finished steel in Taiwan increased for the second week and are likely to rise further to offset the rise in input costs.
The Davis Index for US-origin HMS 1&2 (80:20) in Turkey rose by $10/mt on Thursday from Oct 16. Demand, however, is limited.
In the bulk market, Japanese export offers rose on the back of Tokyo steel raising prices by JPY1,000/mt for scrap deliveries to Tahara, Kyushu, and Okayama plants.
Feng Hsin could raise domestic ferrous scrap next week. The indexes for domestic HMS 1&2 (80:20) in South and North Taiwan rose by TWD300/mt ($10.5/mt) to TWD7,900/mt ($265/mt) and TWD81,100/mt delivered mill, respectively, on Tuesday.
($1=Rs74.11; JPY103.03 ; TWD28.58)