Import scrap prices in India have softened slightly, but buyers have continued to remain on the sidelines owing to the bid-offer gap and the availability of alternative cost-effective raw materials available to secondary mills, SteelOrbis learned from trade and industry circles on Wednesday, February 21.
Even though ex-Europe containerized shredded scrap has been quoted at $410-412/mt CFR Nhava Sheva port in the west, compared to offers at $413-415/mt CFR a week ago, bids have continued to be as low as $400-405/mt CFR amid expectations of sharper declines leading to silent trade conditions.
According to sources, UK origin HMS (80:20) scrap offers have been submitted in the range of $385-389/mt CFR, compared to $390-395/mt CFR last week, with buyers aiming at the price range of $375-380/mt CFR.
“The lack of interest in imports was for multiple reasons. Firstly, buyers were expecting sharper declines in prices on unconfirmed reports of rising unsold cargoes and more sellers in the market. Secondly, local scrap and sponge iron prices were falling faster and it is more cost-effective for secondary mills, without risks of foreign currency transactions and hedging costs,” a Mumbai-based ferrous and non-ferrous trader said.
“But most importantly, finished steel prices have been on a prolonged downtrend and mills are extremely cost-conscious. Most secondary mills have also been operating at low capacity utilization owing to weak margins, resulting in relatively lower raw material demand,” he said.