Steel Market Update: Why Are Scrap Prices Falling In India?
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The Indian Ferrous Scrap industry is facing a significant slump in demand due to the weakened Steel market. This has led to a lack of buying interest in the prevailing offers. The declining Steel prices have also led to smelters based in major markets, such as the west, north, and south regions, holding their bulk purchases for Scrap. In this article, let’s explore more about the same.
Price Movement
- Melting Ferrous Scrap- The prices have seen a significant slump in the range of Rs 300-1,000/ton, week-on-week, with a sharp decline of about Rs 1,000/ton in north and western regions and about Rs 300-500/ton in central, east, and south India.
- Ship Breaking Scrap- The prices have dropped sharply by Rs 700/ton in Gujarat, following the decline in Steel demand.
- HMS (80:20) Grade- Post-decline in offers, HMS (80:20) grade prices have stood at around Rs 40,500-41,000/ton ex-works, Mandi Gobindgarh, Rs 39,000-40,000/ton ex-Raipur, Rs 40,500-41,000/ton in Durgapur, Rs 39,000/t ex-works, Alang, Rs 38,000-38,500/ton in Jalna, and Rs 37,000-37,500/ton ex-Chennai.
Current Market Scenario
- Material Availability- The availability of Scrap has continued to be sufficient in the domestic market, as Ofbusiness learned from industry participants. However, the unsupported import offers are also impacting prices in the Indian market. Imported Scrap continued to be under pressure and reported a decline of about $10-15/ton in April 2023.
- Impact of Import Offers- Despite the drop in import offers, buyers continued to be in the wait-and-watch mode and are waiting for fresh deals in the international market after the Ramadan festival, (which is yet to take place), and accordingly, the market trends will be set globally. The import offers for shredded grade stand at around $445-450/ton CFR India.
Way Forward
Industry participants expect a lack of support in the Indian market considering the continued weak trends globally, along with softening prices of substitute products, such as Sponge Iron and Pig Iron. However, the market directions are expected to be clear by the first week of May 2023, with price announcements by major Indian mills for the May 2023 orders.
Read more: How Is The Indian Steel Industry Performing?
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