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Exporters, India mills struggle on scrap prices

Keywords: Tags  scrap prices, scrap exports, ferrous scrap, steel scrap, heavy melt, HMS, India mills, Sean Davidson

NEW YORK — Indian steel mills continue to resist high offer prices for containerized scrap, and the resulting impasse has affected traded volumes.

More mills have found common ground on prices for heavy melt scrap, but a wide gap on bids and offers resulted in very few sales of shredded scrap this past week, market participants said.

Bids and offers for an 80/20 mix of No. 1 and No. 2 heavy melt ranged from $340 to $350 per tonne c.f.r. Nhava Sheva, with several trades reported in a range of $345 to $348 per tonne and a few falling on either side of that range.

Limited volumes were transacted at the higher side of that price range as mills fought to secure larger volumes at or below $345 per tonne, exporters said.

Mills are now bidding at $340 per tonne for HMS 1&2 (80:20), which several exporters said was unlikely to materialize.

"Sellers will not sell at $340. The numbers do not make sense compared with what the docks are paying. ... A lot of people do not want to sell, as the consensus seems to be that the market will rise," one U.S. exporter said.

Market participants said shredded scrap trading has come to a virtual standstill as offer prices continue to trend at around $380 per tonne, with mills bidding at $365 to $370 per tonne.

Extremely small volume trades were reported at $375 per tonne out of the United States and $380 per tonne from Europe, but for the most part sellers said they couldn’t get buyers to agree on prices.

"(The) Indian market is really unpredictable at this moment, but a price increase to $375 to $380 for shredded is looking like an ambitious target. The best offer I have from an Indian buyer is around $370. The shipment volume to India is at an all-time low, and until volumes increase (offer) price increases will not sustain," one U.K. exporter said.

Even $380 per tonne for shredded scrap might not be desirable for some suppliers due to a strong U.S. market, one U.S. supplier said.

"With the anticipation that the domestic market will be at worst sideways to up, interest in exports to India has faded. (Bids) are still in the $330 f.o.b. Savannah range. They would need to be in the $375 range to get any interest," one U.S. supplier said.

Shredded material availability is very low at U.S. yards, with most supply moving domestically, one trader said.

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