Ferrous Scrap Prices Impacted In India Due To Changed Steel Prices

The Indian scrap industry has been under pressure due to limited demand for steel and substitute products. This has led to a softening in daily offers, resulting in a drop in scrap prices in major consuming regions of India. The drop in steel prices, and sponge iron and pig iron prices have forced domestic scrap suppliers to reduce their offers.

The prices of melting scrap are generally affected by the price movement of sponge iron, billets, TMT, and imported offers. Over the past week, scrap prices have decreased by up to Rs 1,000/ton, due to the decline in steel prices and an increase in the amount of imported scrap.

Reference Price

Currently, HMS (80:20) grade offers in south India stand at around Rs 36,500-37,000/ton, dropped by Rs 500/ton over the past week. In west India, prices are hovering at Rs 36,000-37,000/ton on an ex-works basis, declined by Rs 500-1,000/ton over the past week.

In northern Punjab, prices stand at nearly Rs 40,000/ton on an ex-works basis, declined by Rs 300-500/ton over the past week. All prices are excluding GST.

Imported scrap offers to India were around $455/ton CFR India, for the shredded grade, on bulk bookings, slightly dropped by $5/ton in the current week.

Way Ahead

The price movement of scrap will largely depend on domestic steel products, which are expected to remain weak as demand with mid-sized (secondary) mills remains weak. This increase in selling pressure will also affect the spot demand for melting scrap. The prices of substitute products (sponge iron and pig iron) are also declining, which means there is less scope for a rebound in scrap prices if demand remains limited.

Read more: Indian Pig Iron Prices Decline Following Correction In Billet Prices