NEW YORK U.S.
export sales of containerized ferrous scrap to India remain
virtually nonexistent despite a modest recovery this past week
in Indian currency values.
Strong U.S. market
prices have created a large gap between export offers and bids
from Indian mills struggling to secure demand for finished
product, market players said.
U.S. offers for
shredded scrap reportedly range from $395 to $400 per tonne
c.f.r. Nhava Sheva, while Indian mills bid $380 to $385.
"The Indian rupee has
appreciated to some extentaround 62 to a dollar from 68 a
month ago. However, rebar prices and demand are yet to improve.
Mills are still trying to buy cheaper input materials from
local (suppliers), the United Arab Emirates (UAE) or African
countries," one exporter said.
Rebar prices in India
have remained unchanged for nearly four months, another source
said, suggesting that it will be some time before scrap-based
steel mills in India buy shredded or heavy melt from the United
States, the United Kingdom or continental Europe. "Shredded
scrap has become a luxury for Indian secondary steel mills," he
Any optimism in the
Indian steel market seems to have fizzled, one trader in
Mumbai, India, said. "Imports are down to a trickle, with
almost all mills having slashed production and relying on local
participants said there have been no U.S., U.K. or European
sales to India, with the only reported transactions originating
from the UAE or Africa.
Sources said heavy
melt from some Middle East and African countries sold this past
week at $355 to $365 per tonne, depending on quality.
"(The) Middle East
scrap export market is overly dependent on Indian buyers. And
since mills cant afford to pay higher numbers, heavy melt
prices from the Middle East have not increased as much as
shredded from other parts of the world," the Mumbai trader
But there could be
some light at the end of the tunnel for U.S., U.K. and European
exporters in the near term, a few exporters said.
"In the past two to
three days, Indian markets domestically for (raw material) have
shot up by about $16 per tonne. We expect momentum to gather
pace in the coming months," said a source at a global scrap
exporter to India. Many midsized Indian mills arent keen
to buy shredded from the West, "as the quality has deteriorated
at processors in the U.K. and Europe due to stifling
A second Mumbai-based
trader said market sentiment has improved in India. "Prices of
finished products have started improving a bit, but the gap
between international markets and Indian markets is about $30.
However, scrap from the U.S., U.K. and Europe is still
unviable, as Indian mills are still operating on an average of
50-percent capacity," he said.
Indian mills will seek
local supply of sponge iron, scrap, pig iron and the like in
the near term, participants said.
"Only some feedstock
buying is happening for bigger users, and a lot of domestic
cheaper scrap is available at competitive prices compared to
imported scrap," a third trader in India said. "Over and above
this, finished steel is moving out too slow, creating a
Catch-22 situation for the (steel)makers while the cost of
power, labor and manufacturing is all going up."