NEW YORK Prices for containerized ferrous scrap exports to India have strengthened over the past five days as a weaker dollar gave buyers more room to raise prices.
U.S. and European suppliers also pushed for higher prices due to expectations that their domestic markets could trend higher in April.
However, demand from Indian mills was moderate at best, with very few transactions reported. Market participants said traded volumes were low due to resistance from both buyers and exporters.
While several exporters are holding out for higher prices, several mills are occupied with year-end financial work and will wait for election results in India before deciding on strategies for the rest of 2014.
Nevertheless, export prices for shredded scrap into Mumbais Nhava Sheva port were reported at $380 to $388 per tonne c.f.r., with U.S. export offers at $395 and above, several sources said.
Traded prices are up an average of $5 to $6 per tonne from two weeks ago (amm.com, March 14) and as much as $10 for exporters who sold at the low end of the prior range but the high end of the latest range.
Demand for shred in particular has increased. However, not much trading is taking place. I think trades are being held back by the exporters because of expectations on how April is going to set up, one U.S. exporter said.
U.S. exporters remain mostly on the sidelines, with many saying they need shredded prices to be a lot higher.
Most East Coast (market participants) who look for container exports need $355 per tonne f.a.s. to make things work currently. So far there has been no buyer who can match this level, another U.S. exporter said.
Others pegged Indian bids for shred at $330 to $340 per tonne f.a.s. East Coast ports.
British sellers are willing to sell shredded at $390 to $395 per tonne, a Mumbai-based trader said. It seems that some of them could have large inventories and are looking to get rid of quantities and need to keep selling. Most Indian mills are bidding around $380 to $385.
Meanwhile, containerized scrap sales for an 80/20 mix of No. 1 and No. 2 heavy melting steel scrap were reported up $5 to $360 to $365 per tonne c.f.r. Nhava Sheva.
No heavy melt sales were reported from the United States as Indian importers focused on scrap from the United Kingdom, South Africa and the United Arab Emirates.
Heavy melt shipments from Europe also have been thin, a European exporter said, with domestic markets stronger than current Indian prices. It is very difficult for traders right now. Furthermore, we have to fight with higher freight costs and the very bad dollar-euro exchange rate, he said. It seems that Europe will increase their prices in April again by about 5 ($7) per tonne, and no one knows what the Indians will do.
A second European exporter said that the early signs from India were encouraging. Prices seem to be firm, as we have also fixed some shred in containers to India after a long period of silence, he said, noting that sales were fixed on an f.o.b. basis due to rising freight rates and uncertainty on what those rates might be in April.