Indian Scrap Industry Experiences Moderate Trade: Will It Affect Prices?

The Indian Scrap industry has witnessed a continuation of low to moderate demand, primarily due to declining Steel prices. The weakening Steel demand has resulted in a lack of support for the domestic Scrap market, even though import offers have increased slightly during the last weekend. As a result, Scrap prices in the domestic market have dropped by approximately 1%-2% over a week. Let’s explore how come:

Cautious Approach From Turkey And Southeast Asia

Turkey, the major consumer and trendsetter in the global Ferrous Scrap market, has adopted a cautious approach toward fresh bookings. Consequently, limited trades have been reported, reducing activity in the global Scrap market. Additionally, there has been a decrease in inquiries from major Scrap-consuming countries in Southeast Asia, including Bangladesh, Pakistan, and India, as assessed by Ofbusiness.

Current Prices

• MS Scrap- The prices of MS (Mild Steel) Scrap has witnessed a decline of about Rs 500-1,000/ton or 1% to 2% in the western and northern regions while maintaining stability in the southern part of India.

• Billet- In line with the Steel price movement, Billet prices have also experienced a decline of around Rs 1,000/ton on a weekly basis.

• HMS (80:20) Grade Scrap- Currently, the price of HMS (80:20) grade Scrap stand at around:
  • Rs 39,500-40,000/ton ex-works in Mandi Gobindgarh
  • Rs 38,500-39,000/ton ex-Raipur
  • Rs 39,500/ton in Durgapur
  • Rs 38,500/ton ex-works in Alang
  • Rs 37,500-38,000/ton in Jalna
  • Rs 35,500-36,000/ton ex-Chennai

Import Offers

• HMS 1/2 Scrap- Fresh offers for HMS 1/2 Scrap have been reported at $380-385/ton CFR (Cost and Freight) Turkey, up by $5-10/ton, in a week.

• European Shredded Grade Scrap- The prices for Indian buyers have slightly increased and are currently around $430-435/ton, compared to last week’s price of approximately $430/ton CFR India for European Shredded-grade Scrap.

Market Outlook

As per the industry experts, the market is expected to remain uncertain. Despite limited trades in the international market, there have been slight changes in Scrap prices in the domestic market. Given the weak domestic Steel demand, Scrap suppliers remain cautious about settling deals at lower offers.

Indian smelters holding fresh bulk deals may result in a supply shortage in the domestic market if mill production levels remain constant. As a result, the Scrap market may experience tightness or volatility in the coming days.

OFB’s Opinion

The Indian Scrap industry is currently experiencing moderate trading conditions, with prices inching down due to weakening Steel demand and cautious approaches in both the international and domestic markets. The outlook remains uncertain, with factors such as limited trades, weak domestic Steel demand, and potential supply shortages influencing the market dynamics. Industry participants should closely monitor these developments to make informed decisions in the coming days.

Read more: Indian Steel Industry Faces Low Demand And Declining Prices In Week 4 Of May 2023

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