Indian Scrap Industry Reported Moderate Trade And Marginal Prices Change

Recently, MS Scrap Industry in India has witnessed low to moderate trading activities. Despite limited trade, prices have maintained stability in certain regions, while marginal corrections have been observed in the west and north regions. Trade participants have reported to OfBusiness that Scrap availability remains steady, and there has been a slight uptick in import offers during the last week. This has resulted in fewer price corrections as compared to the sharp corrections seen in Steel prices over the past week.

Import Offers And Supply

It is worth mentioning that India’s domestic Scrap market is influenced by import offers. Approximately 20% of the imported Scrap is consumed in India’s Steel production, while the remaining is melt of domestic. With significant fluctuations in domestic Steel prices, Scrap suppliers in the domestic market are maintaining their supply and are less inclined to sell materials at lower prices. This analysis aligns with the marginal changes observed in import offers, which have remained relatively stable over the past week.

Domestic Price Movement

The prices of MS (Mild Steel) Scrap have witnessed a drop of about Rs 500-800/ton in the western and northern regions while maintaining stability in the southern part. This stands in contrast to the Steel price corrections of about Rs 1,000-1,500/ton seen in the last 3-5 days in the respective locations.

Current Prices

• International- Turkey, known as the world’s major buyer of Scrap, has experienced relatively stable import prices in the last week. Fresh offers for HMS 1/2 Scrap have been reported at $370-375/ton CFR. Consequently, the prices for Indian buyers have also remained stable, reported at around $430/ton CFR, for European Shredded-grade Scrap.

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

Market Outlook

In the short term, it is expected that Scrap prices will experience slight changes as trading activities remain limited due to falling Steel prices. Additionally, global factors such as pressure from macroeconomic conditions and weak demand for Finished Steel globally are unlikely to provide much support to the Scrap industry.

However, it is important to note that the sharp decline in Indian Scrap prices is limited due to lower imports during March 2023 and April 2023. During these months, imports decreased to around 8 lakh tons each month, compared to the period between October 2022 – January 2023, where imports ranged between 10-15 lakh tons each month.

OFB’s Insight

The Indian Scrap market has reported moderate trading activities with marginal price changes. The stability observed in some regions and the steady Scrap availability, combined with the limited fluctuations in import offers, have contributed to the current market conditions. However, the industry faces challenges stemming from falling Steel prices and global macroeconomic factors, which may impact the market outlook for the Scrap market.

Read more: Domestic Semi-Finished Steel Struggles With Continuous Price Decline

For real time commodity prices, latest news, and insights, please download the all NEW and all FREE OfBusiness APP