Imported shredded scrap prices in India were under pressure on Tuesday with mills lowering bids. Despite firm global markets, South Asian imported scrap prices were weighed down by limited support for present price levels. Indian buyers lost interest in raw material trades since finished steel demand failed to pick up. Demand in the auto sector, however, is on the mend, the only positive amid weak domestic fundamentals.
In Turkey, the index for US-origin HMS 1&2 (80:20) settled at $300.63/mt cfr Turkey on Monday, down by $1.12/mt from the prior Friday. Turkish mills have started offering rebar in the US market since Southeast Asian demand has cooled off. Ferrous scrap bookings have slowed. South Asian buyers are thus waiting for clarity in the price direction.
The daily Davis Index for containerized shredded settled at $319.38/ mt cfr Nhava Sheva, down $3.75/mt. Bids for shredded were at $315-317/mt cfr Nhava Sheva, with no supplier interested in those price levels. Yards and traders believe a steep drop in prices is less likely. They believe prices could register an uptick instead with supply still scarce. Few UK yards offered containerized shredded at $320-325/mt cfr Nhava Sheva and Mundra.
The daily Davis Index for HMS 1&2 (80:20) of UAE-origin settled at $307/mt cfr Nhava Sheva, Tuesday, down by $2/mt. Deals for Dubai-origin HMS 1&2 (80:20) were at $305-308/mt cfr Nhava Sheva. Mills’ bids, however, were not over $300-302/mt cfr Nhava Sheva. Scrap grade #1 HMS from Dubai traded at $310/mt cfr Nhava Sheva despite offers of $315/mt cfr Nhava Sheva. Prices are expected to decline further in the coming days. A few trades for HMS 1&2 (80:20) from Australia and Brazil were reported at $300-305/mt cfr Nhava Sheva.
The index for US-origin HMS 1&2 (80:20) settled at $307/mt cfr Nhava Sheva, down by $0.5/mt from Monday. Indian buyers were not keen on booking material from the US, which takes two months at the minimum to arrive, against the delivery period of 10 days from Dubai. Higher offers by the US yards proved to be another deterrent.
Buyers instead preferred lower-priced HMS from Africa and South America.
Billet export at higher prices
In the bulk market, offers from the US west coast were at $320-325/mt cfr Kandla, however, mills were willing to raise their bids only till $300/mt cfr Kandla.
A Gujarat-based steelmaker sold 10,000mt billets at $430-432/mt fob India, equivalent to $475/mt cfr Africa. Billet offers prices quoted by suppliers from Iran and CIS were higher than these levels. Market opinions were divided about prices sustaining in the coming days. However, if these prices sustain, it could support mills’ appetite for imported scrap.
In the domestic market, weak demand and limited construction activity pressured scrap prices. Ingot, billet, and rebar prices fell in the range of Rs700-1,000/mt depending on the region, from the prior week.
Barring major steel producers, most mills are still operating at 60-80pc capacity. Small and medium-scale electric arc and induction furnaces are struggling to find a foothold in the competitive market. A shortage of lower-priced scrap is forcing most of these mills to accept higher offers thus pressuring their profits and straining their cash flow.
The Davis Index for containerized shredded, Tuesday, settled at $311.82/mt cfr India subcontinent, down by $3.6/mt from Monday. The daily Davis Index for containerized US-origin HMS 1&2 (80:20) settled at $299.35/mt cfr India subcontinental, down $0.78/mt. South Asian mills reduced bids amid weak domestic support and cash crunch.