NEW YORK A stronger Indian rupee has sparked the return of Indian mill buyers to U.S. and European shores as currency rates have allowed exporters to raise scrap prices to acceptable levels.
Ferrous scrap exports to India from the United States, the United Kingdom and Europe fell to nearly half the typical trade volumes over the past eight months, with Indian mills struggling to navigate adverse domestic economic conditions and a weak rupee.
However, falling domestic scrap prices in the United States and Europe and a weaker U.S. dollar reinvigorated container scrap export trade to India, with shredded scrap reported in a range of $375 to $382 per tonne c.f.r. Nhava Sheva over the past 10 days.
Market participants said exportersbuoyed by a recent increase in bulk sale prices to Turkey and containerized shredded scrap sales to Indiahave now raised offer prices as high as $390 per tonne c.f.r. Nhava Sheva.
Some exporters reported transacted pre-freight values of $340 to $345 per tonne from ports such as New York and Miami.
For India, the positive is that the Indian rupee has stabilized and local scrap prices have gone up. This has brought buyers back to imports, although not back to its peak since finished product sales are not very good yet, said Aman Rewri, head of scrap trade for Mumbai, India-based Mahindra Group.
Apart from a stronger currency, Indian scrap imports have improved due to an uptick in Indian finished product exports, a second Mumbai-based importer said. A majority of the current steel production is for export orders and not much for domestic consumption. ... And there is not much scrap available locally.
Many exporters expect prices for shredded scrap to hold as India prepares for its general elections.
Customers are waiting for new policies post-election. Depending on the new government and new policies, the markets will move. Customers are indicating bullish sentiments for the long term, one trader said.
A second trader said scrap utilization could increase in India if its integrated mills are forced to turn to scrap. If gas shortages and iron ore availability issues do not get sorted out soon, then some of the larger integrated steel mills could return to using scrap as an alternative, he said.