NEW YORK U.S. containerized ferrous scrap export prices to India are under pressure after Indian mills stepped away from the market following a buying spree a week ago.
Only a handful of Indian mills traded actively last week, and that number plummeted this week as the Indian market continues to search for finished product demand, sources said.
A few sales of containerized shredded scrap were reported this week at $425 per tonne delivered to Mumbais main Nhava Sheva port. Prices are down as much as $10 per tonne from the previous week, with U.S. offers ranging between $425 and $430 per tonne on Jan. 24, according to several market participants. Deliveries to the southeast Indian port of Chennai are trading at a $4- to $5-per-tonne freight premium over levels into Nhava Sheva, sources said.
"The offers at a range of $425 to $430 c.f.r. Nhava Sheva/Chennai for container shred, these are just offers. There has been a lot of talk in the last week, but thats just it: talk. No solid numbers have been given out yet, particularly from the India side," one exporter said.
"There is a sense that there will be numbers out (by the end of the week) on the boxes, particularly to the north as there have been inquiries from a lot of the big mills," he added.
"The market was active last week and is off this week," a second source said. "There is no demand in India for finished goods. Scrap export prices will probably drop $5 next week."
Other sources also speculated that tags are under pressure.
The market is slow and "price softening is expected for February shipments," one source in India said.
"The markets are again under pressure due to finished steel prices dropping $30 in Indias domestic markets," another source in India said.
The limited buyers in the market have indicated $420 per tonne as their next target level for shredded scrap, two additional sources said.
However, a seventh source said prices could decline further.
"Offers from the U.S. are at $425 and from the U.K. at $420. Buyers today are not showing interest at these prices and expect it to correct by another $10 to $15. I guess in a few days pressure will build on sellers to sell their cargo, and thats when prices might correct," he said.
Buying activity is unlikely to gain momentum for at least six weeks as market conditions in India will only improve gradually, the second source said.
"The country has not bought a lot of scrap in a while, so I expect them to be in the market at a slower pace starting in March," he said.