Chennai Scrap Market Holds Firm Amid Limited Supply and Lower Steel Demand

The Chennai ferrous scrap market remains cautious as supply constraints and moderate demand continue to impact price trends. According to BigMint’s latest assessment, the prices of HMS (80:20) scrap have held steady at INR 32,300 per tonne (t) in week-on-week (w-o-w) comparisons, although a slight day-over-day (d-o-d) decline of INR 100/t was observed. Billet prices dropped by INR 500/t to INR 42,500/t, and rebar prices also experienced a decrease of INR 300/t, settling at INR 47,000/t.

The muted demand for steel, influenced by frequent rainfall in Chennai, has slowed trade activity in the region, with buyers hesitant to place bulk orders. This weather disruption has limited the volume of available scrap, preventing significant price cuts. In fact, despite the slower trade, the market has seen a restricted supply of scrap, particularly of the HMS 80:20 grade, with prices stabilizing in the INR 32,000-32,500/t range for local buyers, depending on the payment terms.

Meanwhile, imported scrap offers remain selective, with Australian HMS (90:10) priced between $380-385/t CFR Chennai, and shredded scrap at $390-396/t. A south Indian steel manufacturer recently secured a bulk shipment of CR busheling scrap from Japan at $390/t CFR, which is expected to arrive in December 2024.

The sentiment in the domestic scrap market remains largely stable. However, the ongoing rains and the constrained scrap supply continue to dampen the pace of activity. As for the outlook, market participants suggest that scrap prices may remain steady in the short term, with a possible dip of around INR 500/t in the coming days. This is largely due to the continued pressure from lower finished steel prices, which are exerting downward pressure on scrap values.