NEW YORK U.S. export prices for bulk and containerized scrap to India are under pressure after British sales into Chennai pushed tags lower.
A bulk vessel hauling shredded steel scrap to Chennai from the United Kingdom sold at $430 per tonne c.f.r. Chennai, setting the tone for weaker containerized scrap tags, which fell significantly Friday.
A large international exporter on Friday sold 10,000 tonnes of containerized shredded scrap at $413 per tonne c.f.r. from its British location, effectively lowering the market by more than $10 per tonne from Thursdays price levels, one market participant said.
"My week was going well until the news ... this morning," he said. "(An exporter) sold 10,000 tonnes shred in containers to Chennai at $413 c.f.r. The market was at $420 to $425 yesterday. Now consumers in India are looking to buy at $405 c.f.r."
A second source in India confirmed the development, but added that price offers were even lower. "Some Indian sellers are looking for $400 c.f.r. Nhava Sheva for shred," he said.
A week earlier, shred to Nhava Sheva was trading at $425 to $435 per tonne.
The $20 to $25 drop in prices is also partly due to unsold material sitting at the Mumbai dock, sources said. Several sources reported the arrival of between 8,000 and 9,000 tonnes of unsold shred at Nhava Sheva.
"(It is) being offered at low rates, but (there are) very limited takers," the second source said.
There was no buyer for the material because people had backed out, according to a third source from India. "Here in India, the market is very down; sentiments are very weak," he said.
U.S. exporters said suppliers are now resisting these lower offers in an attempt to arrest the slide in prices.
"Im starting to see some resistance from East Coast suppliers on pricing," the first source said. "Most dealers are looking to hold as of now until July and see what domestic does, as the pricing for export has just been dropped so far that they feel if they wait it out there will be a slight rebound in August."
However, a fourth U.S.-based exporter questioned that strategy, saying the market will weaken again in July.
There could be some respite for exporters after a Gulf Coast exporter sold a mixed bulk cargo to Turkey at a composite price of $388 per tonne c.f.r. for a 90/10 mix of No. 1 and No. 2 heavy melt scrap and shred.
The price equates to about $382 per tonne c.f.r. for 80/20 heavy melt, which is about $2 per tonne higher than previous sales.
Market sources also dismissed rumors that a different East Coast exporter had sold a second bulk cargo to Turkey at this past weeks price level of $380 per tonne c.f.r.
As of Friday afternoon, only the one bulk cargo was sold to Turkey from the United States, and it hadnt come from the East Coast, sources said.