Steel Demand Lowers Continuously: Indian Ferrous Scrap Market Remains Sluggish
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The Indian ferrous scrap market is facing a challenging situation due to weak demand for steel and related products. As a result, scrap prices have been declining in major consuming regions of India. In this article, we will highlight the recent trends in the Indian scrap market and the factors affecting scrap prices.
Current Reference Prices
- HMS– HMS (80:20) grade offers in south India are stable on weekly comparison and stood at around Rs 36,500-37,000/ton, while in west India, prices have dropped by Rs 500-1,000/ton against the previous week and are hovering at Rs 38,000-38,500/ton on an ex-works basis.
- In the north region of Punjab, HMS prices stand at nearly Rs 40,500-41,000/ton on an ex-works basis, having fallen by Rs 1,000-1,500/ton over the past week. All prices are excluding GST.
- Imported Scrap- Imported scrap offers to India were around $475-480/ton CFR India, for the shredded grade, on bulk bookings, declined by $5-10/ton, week-on-week.
- Sponge Iron And Pig Iron- Over the past week, steel prices in the Indian market, including sponge iron and pig iron, dropped by Rs 1,000-1,500/ton.
Factors Affecting Scrap Prices
Sponge iron and pig iron prices have put pressure on domestic scrap suppliers to reduce their offers. Melting scrap prices are typically influenced by the price movement of sponge iron, billets, TMT, and imported offers.
As seen in the recent week, imported scrap prices are highly volatile, where they moved up by approximately $15/ton from 13 March 2023 – 15 March 2023. By 16 March 2023- 18 March 2023, it has fallen. This has made Indian buyers cautious about booking imported material too, which is slightly higher in cost compared to domestic material.
Insight
The short-term outlook for scrap price movement will depend on domestic steel products, which are expected to remain subdued as secondary steel demand remains weak. Therefore, scrap prices in the domestic market are less likely to find support, subject to the steel products‘ price movement. Substitute steel products (sponge iron and pig iron) prices are also declining, which means there is less scope for a rebound in scrap prices if demand remains limited.
Read more: Limited Demand Weighs On Indian Steel Prices During Week 11 of 2023
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