NEW YORK U.S. exports of
containerized ferrous scrap to India may come under pressure as
weaker demand for certain finished products in India and
currency fluctuations have left some buyers hesitant.
"Indian markets are really
messed up. There is no demand for finished steel. Construction
is very slow, and most steelmaking units are losing money on
every ton they are producing," one source said.
Sources in the United States,
United Kingdom and India reported sales of U.S. containerized
shredded scrap into Nhava Sheva in a range of $424 to $430 per
tonne c.f.r. this past week, and while prices were relatively
unchanged compared to the previous week, many say they are
likely to come under pressure, especially if the Indian rupee
continues to struggle against the U.S. dollar.
A second source cited regional
power shortages and low Indian mill capacity rates of between
50 and 60 percent as another reason for a possible softening in
"The domestic finished D-bars
and billets are down even after mills (began) operating at 50
percent production. The demand of finished steel is very poor
and the government contracts and large projects are in a limbo.
Now with the dropping off in Turkish demand, the prices are
again turning soft on scrap," said a third source.
However, while many agreed
export prices of containerized ferrous scrap to India were due
for a softening, a number of sources confirmed the apparent
weakness may not be the same in every Indian port.
Mumbais Nhava Sheva port, for example, is said to be
experiencing more strength than the southeastern Chennai
"I have a mixed feeling on
India," the second source said. "Its more positive in the
Nhava Sheva region, mainly bearish in Chennai region. Most
people expect a price softening by $15 to $20 per tonne."
Others said they expected any
weakening to be short-lived.
"Demand has been good from
certain mills, but most of them are still keeping away from the
market due to a poor demand in finished products and the strong
dollar. However, I see things now improving, and buyers should
be back in the market," a fourth source said.
Meanwhile, a fifth source said
it isnt Indian steel mill weakness leading to a possible
decline in U.S. export prices, but rather the fact that scrap
from the United Kingdom is proving more economical in
"Scrap demand from Indian mills
is good. It seems like U.K. export is the most attractive to
India at the moment. (Shred) prices from there are around $428
to $430 per tonne c.f.r. Nhava Sheva. U.S. East Coast exporters
are now looking for $435 per tonne c.f.r. and more. The market
from the U.S. seems strong and they are expecting December
prices to move up further," he said.
Meanwhile, export sales of an
80/20 mix of No. 1 and No. 2 heavy melt were reported into
Nhava Sheva in a range of $405 to $415 per tonne this past
week, with export sales of turnings in a $375- to
$385-per-tonne range c.f.r. Nhava Sheva.
In Indias neighboring
markets, Pakistan is suffering from similar power shortage
issues and has picked up shredded scrap at anywhere between
$415 and $430 per tonne, sources said, while to Indias
east, Bangladesh has reported recent liquidity issues, but the
outlook is said to be turning up.
"My impression was that the mood
(in Bangladesh) was not so negative. Steel mills are mainly
supplying from local ship-breaking yards at levels of $425 to
$428 delivered," a source said.