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Scrap container market awaits Indian buyers

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

NEW YORK — U.S. exports of containerized ferrous scrap to India have failed to gain momentum despite an encouraging currency level as demand from Indian steel mills remains uncertain.

Market participants offered mixed reviews, with some reporting steady demand but others seeing little or no interest from Indian buyers.

Prices for containerized shredded scrap delivered to Nhava Sheva are in a range of $410 to $415 per tonne, ex-United States or ex-United Kingdom, sources said, down $10 from a month ago (, March 15).

A large U.S. exporter said that with the rupee trading at close to 54 to $1, he expected Indian buyers would rush for scrap. "But there is no buyer in the market. People should grab at the $410 level. There is problem with electricity in north India. The state of Punjab increased electricity costs by 50 percent, so a lot of mini-mills are shutting down. The south continues to suffer from long electricity cuts daily. This has lowered demand," he said.

A smaller British exporter also reported weak demand. "The price range for shredded is $410 to $415 on thin trade. Customers are a bit worried about falling gold, silver and copper prices," he said. "Demand is definitely thin, especially at the right price (for sellers)."

However, other exporters said demand has not ground to a halt.

"The demand is OK. I wouldn’t call it thin because there are mills buying. Shred is between $410 and $414, and it is moving at those numbers. We sold today at $413," said a source at a second U.S.-based exporter that has several offshore locations. "There are buyers in the market—just the quantity has been reduced."

The exporter said that a majority of the shredded sales to India are originating from Britain, with only some shred being sold from the United States.

"The depressed market has led to (some U.S. exporters selling shred to India) and also the fear of what next month may bring. The majority of that, and with some consistency, tends to come from Florida. In the U.S., that is where the box market starts for shred, then it works its way up the coast. The reason for that is that there is one mill in the entire state of Florida. That does not leave these guys with a lot of options; thus, they have to export," he said.

Some European exporters agreed.

"I can confirm the prices in India are around $411 to $415 for shredded. Demand is steady in some areas, but in the south it is weak," said a source at a large European exporter, who added that prices are under pressure. "There is a big pressure in Europe due to the long absence of Turkey; plus, the local (European) mills are buying very slowly. There is an absolute silence here. Secondly, the euro/(dollar) exchange rate is making people more nervous. The feeling is that (the) Turks will put further pressure on numbers due to a high euro. Therefore, everybody wants to offload some stocks."

"Inventories in yards are normal and inflow of scrap is good in a major part of Europe," he added.

A buyer in India also reported "good" demand and said that the rupee could encourage more buyers to step into the market. "Nobody cares anymore what is going on in Turkey. It is all about the Indian market," he said. "There is also a bulk vessel booked in Chennai at $415. But there is no scrap at all in India at the moment."

A supplier to U.S. exporters called export activity "very spotty," while an Indian trader said some Indian buyers are looking for bulk deep-sea cargoes but at prices below $400 c.f.r. "That’s never going to work for now. Shredded in containers is around $410 to $415 c.f.r Nhava Sheva, with most international markets showing poor demand for scrap," he said.

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