NEW YORK U.S. ferrous scrap export prices to India rose this week as markets welcomed the countrys election of a pro-business prime minister, which led to a strengthening of the Indian rupee.
A stronger rupee against the dollar and a short-term ban on iron ore production in India was all scrap suppliers needed to raise prices to Indian mills.
Market participants said ferrous scrap prices for containerized shipments jumped about $5 per tonne this week, following a similar increase in local sponge iron prices.
Buyers for Indian mills and their suppliers said the sentiment is extremely positive as Indias prime minister-elect, Narendra Modi, is expected to enforce market-friendly policies that he first introduced as chief minister of his home state of Gujarat.
A recent order by Indias Supreme Court that banned iron ore production in the state of Orissa also triggered a rush to secure raw materials, traders said.
"The Indian scrap market is on fire due to the recent Supreme Court ban on iron ore in Orissa. Its crazy here at the moment," one Mumbai-based trader said. "Panic buying is happening and scrap imports have become viable and attractive at the moment vis-à-vis domestic sponge iron, whose prices continue to shoot up due to the iron ore ban."
U.S. exporters and suppliers said bid prices from Indian buyers shot up as much as $8 per tonne this week.
"The election and stronger rupee is helping prices. Prices are moving again. I have three firm offers for shred in containers ranging from $370 to $372 per tonne delivered to the Port of Savannah," one supplier source said. "If the U.S. domestic market drops again it will be very close to what mills on the coast are paying. At those levels or slightly higher I believe we will see scrap leaving in containers to show domestic consumers that dealers again have an option."
U.S. and European exporters of containerized shredded scrap and Indian buyers reported transactions of shred in a range of $404 to $409 per tonne c.f.r. Nhava Sheva, up $4 per tonne from a week ago, while 80/20 mixes of No. 1 and No. 2 heavy melt reportedly traded in a range of $380 to $385 per tonne c.f.r. Nhava Sheva, up $5 per tonne in the same comparison.
Market participants said No. 1 heavy melt from South Africa and the United Arab Emirates sold into India in a range of $395 to $405 per tonne, up $5 per tonne, while industrial scrap sales of grades like No. 1 busheling were reported at $415 to $425 per tonne.
In Far East Asia, market participants reported thin trading volumes into countries like Taiwan and South Korea, with even fewer sales reported into Indonesia, Vietnam and Thailand.
Containerized HMS 1&2 (80/20) prices continued to trend between $340 and $345 per tonne c.f.r. Taiwan this week, unchanged from a week earlier, while f.a.s. Los Angeles prices were reported in a range of $320 to $330 per tonne.
Export prices into Vietnam were reported at about $10 per tonne above the range into Taiwan, while busheling sales into Indonesia reportedly were in a range of $405 to $408 per tonne c.f.r. Indonesia.