NEW YORK East Coast
containerized ferrous scrap exports to India have hit a wall as
U.S. suppliers push for higher prices and buyersciting a
strong dollarhope for some reprieve.
Market participants in the
United States, the United Kingdom and India pegged the current
price level for containerized shredded scrap at somewhere
between $420 and $425 per tonne c.f.r. Nhava Sheva, based on
bids from the few buyers in the market. However, actual deals
from the East Coast have been few and far between as market
players find themselves unable to agree on a price.
"The real market is at around
$425 per tonne, delivered Nhava Sheva. Buyer offers are at that
level, but we have not made any sales because U.S. suppliers
are asking for $385 per tonne f.a.s. East Coast. If you catch
freight at $40, that puts the net cost at $425, so something
has to give," one U.S. exporter said.
"I think suppliers will have to
go down because Indian buyers will not move, nor will Turkey
raise prices. The dollar is so strong (that) you cant
export much. So (the) price has to go down if people want to
make sales," he added.
U.S. suppliers have also held
onto material in anticipation of a stronger domestic market
next week, sources said. As a result, the impasse between
suppliers and exporters to India is expected to continue until
domestic trade for March settles.
"We are still around $420 c.i.f.
Nhava Sheva, but there is a general consensus of strengthening
prices," a second exporter reported. "With that said, I
dont see much more than $5 to $10 of additional upside,
as fundamentals in India have not shown enough improvement to
justify anything more. Turkey is up, but with the same kind of
sentiment that finished good sales are not strong enough to
keep the momentum going."
A third source, however, said
that he does not expect the Indian market to strengthen at all,
as the steel sector is suffering the effects of bad government
policy and demand remains weak.
At the same time, a stronger
dollar and weaker euro and pound have led more countries
outside the United States to export to India due to currency
affordability, he added.
A scrap exporter from England
confirmed this development and said that he had concluded sales
into Nhava Sheva in a range of $410 to $415 per tonne for
shred, with heavy melt sales $15 to $20 below those levels.
"There is some interest in India
for buying, but (the) Indian market is range-bound, with
shredded between $410 and $420 for the last couple of months,"
another exporter said.
"It is very difficult to predict
the market direction, as there is still low demand and low
supply. The key reason for (a) price increase is the shortage
of supply, which should get normal as we approach spring and
summer," he added.
A source in India confirmed that
markets there have been relatively quiet, with very few buyers
purchasing small quantities.
"It does not seem like markets
will improve anytime soon, as excess capacity and lack of
demand in finished products are causing many plants to either
cut production or shut down," the Indian source said.
"Its a difficult phase now for the steel industry."
However, Indias finance ministry was set to deliver an
annual budget Feb. 28, which several sources said could turn
things around if it includes positive measures for the