Indian Ferrous Scrap Market Lags Support Owing to Softening Steel Prices

The ferrous scrap market in India reported a sharp surge in the last few weeks. However, the market lagged support post that, as buyers in the steel market turned cautious, making demand dull.

Notably, the secondary steel market including billet prices in India, which was on a sharp rise mode, turned volatile during the second week of May 2024 (6-11 May). The prices initially rallied during the first half of the second week of May ’24, however, in the latter half, they showed a down-trend.

A slow demand on a significantly high price range further turned trends cautious, resulting in a decline in prices.

It was also noted that, since the trades were healthier from a few weeks, a temporary pause mode was opted by the participants as they had placed sufficient orders in the last few days. This created a cautiousness in the market, leading to a softening of prices.

According to the assessment, the domestic scrap prices moved down by Rs 1,000-1,500/ton during the second half of the previous week against a surge of up to Rs 1,000/ton in the initial days.

Post a significant surge in prices, the prices recorded over a six-month high during the first week of May. However, with the recent decline, the current scrap prices are nearly a month low.

Ferrous Scrap Prices 

With the recent decline, the prices for ferrous scrap (HMS 80:20) in various markets stand as follows:

• Mandi Gobindgarh: Rs 37,500-38,000/ton (Down by Rs 1,500/ton, week-on-week)

• Raipur: Rs 38,000-38,500/ton (Down by Rs 300-500/ton, week-on-week)

• Durgapur: Rs 37,500-38,000/ton (Down by Rs 500-1,000/ton, week-on-week)

• Alang: Rs 38,500-38,600/ton ex-works (Down by Rs 500/ton, week-on-week)

• Jalna: Rs 36,000-36,500/ton (Down by Rs 500-1,000/ton, week-on-week)

• Chennai: Rs 35,500-36,000/ton (Up by Rs 500-1,000/ton, week-on-week)

Will Scrap Prices Drop Further?

Industry participants are of the view that the ferrous scrap industry might register volatility in prices, but a significant fall in prices seems less likely considering the lessened imports in recent weeks. This would ultimately result a continued slight shortage of scrap. And with no excess availability of the material, the prices seem to remain supportive.

Also, as elections are going to end in the country in the coming few weeks, a resurgence in steel demand is expected as a lot of major projects are in the pipeline and might get funds once the government forms in the country. Hence, with expectations of an optimistic demand in the near future, the scrap suppliers may resist to further cut their prices despite the current slowdown in sales.

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