Prices for domestic ferrous scrap largely declined in India on Tuesday. A fall in US-origin HMS 1&2 (80:20) prices in Turkey by $1.12/mt weakened the domestic market. GST raids in Mandi Gobindgarh, a landmark Indian market, also had a bearing on prices. Most market participants state there is a lack of clarity about the direction in which the market is set to move in the coming days.
The bi-weekly Davis Index for HMS 1&2 (80:20) declined by Rs500/mt ($6.79/mt) from the prior Thursday to Rs24,200/mt ($328.64/mt) del Indore mill while the index for sponge iron slid by Rs1,500/mt to Rs22,000/mt del mill. Steel demand is still under pressure despite the government announcing infrastructure projects in various parts of the country. These projects, however, could spur steel demand in the medium to long term.
In Raipur, the bi-weekly index for HMS (80:20) settled at Rs24,950/mt delivered mill, down by Rs500/mt, and the index for sponge settled at Rs19,100/mt delivered mill, down by Rs900/mt.
Mills in Kutch, Gujarat have reduced their rebar offers by around Rs1,200/mt in the last two days due to a slump in domestic demand as per Davis Index sources. This has dragged scrap and sponge iron trades in the western part of the country. Traders in Ahmedabad state sales for the last three days are close to nil with buyers adopting a wait-and-watch approach. Mills are also offering a discount of Rs100-300/mt, depending on the quantity to boost trades.
The daily index for HMS 1&2 (80:20) and sponge iron declined by Rs200/mt to Rs23,200/mt del Mumbai and Rs19,800/mt delivered mill, respectively.
In the North, the bi-weekly index for HMS 1&2 (80:20) fell by Rs350/mt to Rs24,750/mt del Ludhiana mill while the index for sponge iron fell by Rs900/mt to Rs22,300/mt del mill. The daily index for HMS 1&2 (80:20) settled unchanged at Rs22,000/mt del Mandi Gobindgarh mill, while the index for sponge iron fell by Rs100/mt to Rs22,500/mt del mill. Most mills have been facing a shortage of oxygen cylinders, used in the production process. With the rise in new COVID-19 cases in India refusing to slow their pace, these cylinders are being diverted to hospitals for the treatment of patients with moderate to severe symptoms.
In South India, the bi-weekly index for HMS 1&2 (80:20) fell by Rs600/mt to Rs22,00/mt del Hyderabad mill while the index for sponge iron fell by Rs500/mt to Rs19,500/mt del mill. The Chennai market, however, settled unchanged with the indexes for HMS 1&2 (80:20) and sponge iron at Rs24,000/mt and Rs20,500/mt delivered mill, respectively.