NEW YORK U.S. export
prices for containerized ferrous scrap delivered to India
dropped over the past four trading days on poor demand and
reports of two bulk sales from Australia to different Indian
Market participants said that
prices for containerized shred fell about $5 per tonne from two
weeks ago to a range of $405 to $408 per tonne c.f.r. Nhava
Sheva. Sources said that buyers have now stepped away from the
market in hope that prices will fall to $400 per tonne or
Meanwhile, a bulk cargo of
30,000 tonnes of shred originating out of Australia and Europe
reportedly was bought by a large Indian scrap company at $409
per tonne c.i.f. Chennai, while a 45,000-tonne cargo of shred
originating from Australia was booked at $400 per tonne c.i.f.
Mumbai and Kandla, according to different sources.
The bulk deals likely will add
to the price pressure on containerized shipments and affect
containerized volumes. "It will further slow container traffic,
making the market harder," one source said.
"A few days back, shredded deals
were done at $405 to $408 in north India, but in south India it
is $410 to $415," a second source said. "Prices are falling not
only in India but throughout Asia due to weak demand for
finished products. Most steel mills are under tremendous
pressure to reduce scrap cost. Also, as Turkey is not so
aggressive in the market for U.S. scrap, a lot of scrap dealers
in the United States and Europe are looking for a window to
sell at least some decent tonnages."
Sources said that heavy melt
sales ranged from $385 to $390 per tonne late last week for an
80/20 mix of No. 1 and No. 2 heavy melt. But buyers this week
have not responded to offers at $380 per tonne, according to a
third source who offered British shred at $400 to $405 per
tonne c.f.r. Nhava Sheva and HMS 1&2 (80:20) at $380.
"Even on these prices, there are
not many buyers in the market," he said. "At present,
sentiments are very weak."
"Sellers are at those prices,
but buyers are looking for below-$400 levels," the first source
said. "They feel a further decrease of $10 to $15 per tonne is
possible. Flat products are dropping every day. However, I see
the bottom hitting $390 to $395 for shred in containers to
A broker in India said that
Indian demand and scrap import prices have fallen rapidly in
part due to the increased use of alternatives.
"A distinct change is that
sponge iron is being used more and more in the westup to
80 percent in some cases. With the increase in sponge iron
consumption, the demand for scrap has gone down, which
consumers are meeting with the lowest-cost scrap they can buy,"
"In the last three weeks, almost
200,000 tonnes of pellets have arrived at Kandla port. This is
all for making sponge iron" he said. "Thus, it can be said that
there is a distinct change in consumption patterns, with
consumption of scrap going down. In north India, demand for
scrap has also been very poor due to very tight liquidity and
low demand for finished product."
A buyer for an Indian steel
producer confirmed that his mill had bought shred at $405 to
$408 per tonne and HMS 1&2 (80:20) at $385. "I would
normally not say this, but I believe that these price levels
could actually stick," he said. "(The) Indian market is not
heating up as quickly as some thought in terms of an Indian
economic turnaround in 2013."
One U.S. exporter, however, was
confident that prices will not slip below the $405-per-tonne
level for shred delivered into Nhava Sheva.
"(Theres) not too much
trading yet, as those numbers came in on Thursday and Friday of
last week, but I do think you will see volumes moved at those
numbers," he said. "It is just the suppliers adjusting, and
with the new month knocking at the door, most suppliers will
weigh their domestic options compared to export. That being
said, I believe you will see much more volumes out of the
United States this month."