Buyers in India shied away from imported scrap trades amid mixed indications about the global price direction in the coming days. This, despite a recovery in production rate and shortage of domestic scrap.
In the domestic market, rebar and billet prices lost their steam for the first time in August. Rebar was dropped by about Rs800-1,000/mt ($10-13/mt) from around two days ago. Traders are unsure about a price surge, given the slow end-user demand in the construction sector at least till the wet season ends.
In September, when the rains start their withdrawal, a government boost for construction and infrastructure sectors could, however, spur demand. Additionally, should the government agree to secondary steelmakers’ suggestions and restrict steel imports and hike duties, the domestic steel industry could benefit.
In the bulk market, offers declined by $5-10/mt for HMS 1&2(80:20) to $295-300/mt cfr Kandla, however, no trades were reported.
The daily Davis Index for containerized shredded settled at $310.88/mt cfr Nhava Sheva, down by $2.75/mt from Tuesday. A few offers for UK-origin containerized shredded were at $315/mt cfr Nhava Sheva and Mundra with no buyers interested at those levels. Buyers were unwilling to pay over $308-310/mt cfr Nhava Sheva for shredded on Wednesday.
The Davis Index for HMS 1&2 (80:20) of UAE-origin settled at $300/mt cfr Nhava Sheva, down by $2.95/mt from Tuesday. Prior confirmed deals for Dubai-origin material were heard at $295-300/mt cfr Nhava Sheva for its shorter delivery time compared to that of the UK or the US. Many trades for HMS 1&2 (80:20) from Australia and Brazilian yards reported in the range of $290-300/mt cfr Nhava Sheva depending on quality.
Offers for US-origin HMS 1&2 (80:20) were at $300/mt cfr Nhava Sheva on Wednesday, with bids at $290-295/mt cfr Nhava Sheva. The index for US-origin HMS 1&2 (80:20) settled at $296.25/mt cfr Nhava Sheva, down by $2.32/mt from Tuesday. US suppliers, however, refused to lower offers amid the belief that global demand is expected to remain strong.
A few buyers opted for domestic scrap and sponge iron over imported scrap. Most steel traders have reported around 60pc drop in their monthly sale volumes and are facing cash constraints.
The Davis Index for containerized shredded settled at $302.91/mt cfr India subcontinent on Wednesday, down by $3.42/mt from Tuesday. The Davis Index for containerized US-origin HMS 1&2 (80:20) settled at $288.45/mt cfr India subcontinent, down by $2.75/mt. A decline in bids despite firm offers pulled indexes down. Containerized freight rates also dropped from the prior week as per Davis Analysis.