Shipbreaking scrap prices dropped with mills stepping away from purchases. Yards in Alang opened after two days after the cyclone Tauktae weakened on Wednesday.
Activities in Alang have slowly started to return to normalcy. Mills in Gujarat continued to face a shortage of oxygen cylinders which has forced them to run with a 20pc capacity. Stringent lockdown is also affecting production, causing breaks in the supply chain.
Shipbreakers reduced their offers on Wednesday and the daily Davis Index for 6Ani declined by Rs700/mt ($9.56/mt) to Rs41,100/mt ex-Alang and the index for 8Ani declined by Rs600/mt to Rs41,100/mt ex-Alang.
Domestic mills are focused on export markets as local sales of finished steel remained low with sluggish demand from consuming sectors. The index for 12Ani declined by Rs700/mt to Rs41,100/mt ex-Alang.
Gas cutting activities have slowed down significantly on a dearth of oxygen and low tonnages. Mills have adopted a wait-and-watch approach before procuring raw material as the lockdown has cast uncertainty over the markets, at least for the near term.
Demand from the construction and automobile sectors stayed low due to a slowdown in activity amid the cyclone and rising COVID-19 cases. The index for 1kg plates declined by Rs400/mt to Rs40200/mt ex-Alang and the index for 5kg plates declined by Rs500/mt to Rs41,200/mt ex-Alang.
Market participants are unclear regarding the price direction. A few yard owners believe that ferrous scrap prices will be buoyed by low availability.
The index for HMS attachments and Melting declined by Rs300/mt each to Rs40,000/mt and Rs39,000/mt ex-Alang, respectively.