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Container shipments to India remain scarce

Keywords: Tags  ferrous scrap exports, scrap prices, containerized exports, Sean Davidson

NEW YORK — A stronger U.S. scrap market and higher freight costs off the East Coast have combined with dismal demand from India to continue a stalemate in containerized ferrous scrap exports to one of this country’s top export destinations.

A slight reprieve in exchange rates failed to trigger any significant buying by Indian mills or brokers this past week as market conditions in India remain bleak, several sources said.

"India seems to be out of the international import market for many reasons," one scrap exporter said.

A weak rupee against the dollar, large tonnages of scrap available from local ship demolition, a lack of electricity and a higher-percentage use of local sponge iron were among the reasons for Indian mills’ exit, the exporter said.

"Today, you cannot sell (shredded scrap) higher than $420 to $425 c.f.r. Nhava Sheva, and it makes no sense to (export) from Europe as well," he added.

Market participants said U.S. offers for shred exports are around $430 per tonne c.f.r. Nhava Sheva, with at least one source saying even that level is not viable for sellers.

"Indian traders aren’t very active in the container market right now. Suppliers haven’t received any firm bids throughout the week. Demand overall is very weak," a second source said. "No one wants to make any moves first. Offers are at $430, but nothing (has been) done at those levels. I heard some deals done at $420, but that was for older purchases."

A buyer for a mill in India confirmed some U.S. offers were at $427 to $430 per tonne, with European-origin shred priced at $425 per tonne. The buyer said he had concluded purchases of only 1,000 tonnes of shred out of Europe at $425 per tonne.

Of the few exporters who reported concluding some trades with India this past week, one said the market for cut grades was reasonably decent.

"We just did deals into Chennai at $425 and (deals at) $421 into Nhava Sheva, but that was from the U.K. Numbers to Nhava Sheva were at $420 to $422, and I have not heard anything above that," he said. "There were not that many (deals) done for the last two weeks. We have actually had more business into Bangladesh over the last two weeks."

Heavy melt was trading in a range of $395 to $400 per tonne c.f.r. Nhava Sheva and between $403 and $405 per tonne to Chennai, he said. "In general, shred has not been moving too much over the last two weeks. Heavy melt has been trading pretty well, particularly to the south. If you have plate and structural scrap or good No. 1 heavy melt, you can move it to any port, no problem."

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