Imported scrap offers into India have increased by $10-15/tonne in the last two weeks, indicating a significant recovery after almost two months of decline.
The cost of EU-origin HMS scrap is $380–385, cfr India, while the price of shredded scrap is $410–415/t. A few offers ranging from $420 to $425 per t CFR for shredded scrap have been made; buyers’ acceptance is still pending.
Positive sentiment in the Indian steel circuit after the fiscal year ended in March is the reason for the increase in import offers.
Indian Steel Restocking Drives Imported Scrap Demand: Prices Surge on Domestic Market Momentum
Restocking of steel finished goods and raw materials has risen in the Indian market during the last two weeks. In just two weeks, the cost of domestic scrap or rebar has increased by INR 2,500–3,000/t ($30–35).
Since January’s end, Indian rebar producers have only made purchases based on necessity. The need for restocking has arisen because all of the stocks of DRI, scrap, and rebar have now run out to an extremely low level, according to a Mumbai-based scrap trader.
Market players are informed that although there has been a positive movement in both domestic scrap demand and prices, there has also been an increase in offers for imported scrap. However, very few deals for imported material are being completed.
“The rise in domestic scrap or rebar prices is sentiment-driven and a short-term as there is no fundamental shift in demand,” quips a trader from Delhi. Furthermore, consumers favour homegrown content over imports.”
This is primarily due to longer lead times for imports and the depreciating value of the Indian rupee. In light of growing geopolitical unrest in the Middle East and rising prices for gold and crude oil. The Indian rupee recently fell to a record low versus the US dollar.
A rebar manufacturer based in northern India advises caution in light of the current market uncertainty. The cost of scrap imports is rising, and the sustainability of end-user demand is uncertain. Waiting is preferable to making large purchases, especially when it comes to imports.