NEW YORK Indian ferrous scrap imports are likely to remain dismal until the end of August as buyers battle a weaker currency and finished product demand.
A massive gap between export offers and mill bids for containerized shredded scrap led to another stalemate in trading between the United States, Europe and India, with smaller-volume deals reported mostly in a range of $395 to $400 per tonne c.f.r. Nhava Sheva.
The Indian rupee weakened against the dollar, forcing most major mill buyers to bid for shredded in a range of $380 to $395 per tonne, depending on location. Meanwhile, exporters were looking for between $400 and $410 per tonne, according to market participants.
"The depreciation in the rupee this (past) week has hurt sentiment," a Mumbai-based trader said. "Indian market conditions continue to be weak with limited interest, while international markets seem to be getting stronger."
The weaker rupee has brought trading to a halt, U.S. and British exporters said, with many speculating that it would be two to three weeks before Indian demand returned.
"Im hearing most container business has fallen off. Bids for shred, f.a.s. East Coast, are in the $350- to $355-per-tonne range. But Im also hearing there arent many offers out there. Finished product prices are still unstable," a U.S. exporter told AMM.
"With the exchange rate between the rupee and the dollar widening, and the monsoons, (bids from) India have been very sporadic," a second East Coast exporter said. "Some of the larger mills are still looking for scrap but are not competitive with domestic pricing. The best (bid) I have had was $350 per tonne f.a.s."
A third exporter said that Indian markets continued to be dull. "There has been almost no buying (for about a week) or so as production (has been) cut by almost 50 percent, and yet prices of finished products are correcting every day. Sales of rebar are very slow and mills still have a lot of stock, which will take at least a month to be cleared," he said.
Meanwhile, a move by Indias federal government to change the government body regulating its shipbreaking industry has attracted a lot of attention.
The government has shifted control of its sizeable shipbreaking industry to the countrys Ministry of Shipping and away from the Ministry of Steel.
The change is aimed at helping India bring in more ships for breaking, one market participant said. "The Shipping Ministry is seeking help from the Japan International Cooperation Agency to upgrade the existing infrastructure at Alang (in the Indian state of Gujarat). Apart from this, they are looking to modernize the Darukhana shipbreaking facility at Mumbai port."
The Mumbai-based trader said the change in oversight will make the industry more efficient. "Coming under the Ministry of Shipping could help with faster processing of paperwork and formalities. It might streamline the regulatory process," he said. "I dont think it will have any impact on the number of vessels coming to India. (It will) just make the red tape less for shipbreakers."