India: Chennai ferrous scrap prices rise by INR 400/t w-o-w, on improved steel prices - 12 Mar

• Supply tightness and costs support Chennai scrap gains
  
  
• Billet prices increased by INR 1,000/t w-o-w
  
  

In the Chennai market, HMS (80:20) scrap prices increased by INR 200/t on a daily basis to INR 33,200/t, marking a weekly gain of INR 400/t, according to BigMints assessment. Billet prices moved up by INR 1,000/t w-o-w to INR 45,500/t, while remaining unchanged in daily trading. Similarly, rebar prices climbed INR 500/t w-o-w to INR 50,000/t, with no change observed on a d-o-d basis. The improved momentum in semi-finished and finished steel trade has contributed to strengthening the overall market outlook.

Imported and domestic price trends

Market participants reported that Australia-origin shredded scrap was offered at $380-385/t CFR Chennai, while HMS (80:20) was quoted at $360-365/t CFR. However, buyers were bidding $5-10/t lower than the prevailing offer levels. Buying interest remained limited as mills considered current offers to be on the higher side. Instead, buyers were focusing on alternative origins such as Malaysia, Singapore, Hong Kong, and Thailand, where comparatively lower-priced cargoes and readily available loaded shipments were being preferred.

In the domestic market, HMS (80:20) scrap prices were assessed at INR 33,000-33,500/t for immediate payment, while transactions on extended credit terms were concluded at higher levels of INR 33,500-34,000/t. Overall market sentiment remained stable, supported by steady liquidity conditions. Both buyers and sellers adopted a cautious trading approach, balancing procurement volumes with payment terms and financing availability.

Buyer-supplier sentiments

A mill representative noted that rising coal prices amid the IranIsrael war have pushed sponge iron prices higher in the market. Billet demand has improved in recent sessions, partly due to a maintenance shutdown by a merchant billet producer in the region. Meanwhile, rebar demand is reported to be above average, supported by steady project-related consumption, although retail demand remains slightly subdued. Overall, rebar inventory levels at major mills are estimated to be around 15-20 days.

A scrap supplier indicated that HMS (80:20) prices were currently hovering in the range of INR 32,500-33,500/t, with variations largely dependent on payment terms and mill-specific volume requirements. Market sources highlighted that the Iran-Israel war has disrupted the availability of commercial gas, leading to supply shortages. With most scrap processing units relying on gas cutting for material preparation, the recent spike in gas prices currently around double the usual rate has increased operational costs for processors. Amid rising input costs, suppliers believe there is potential for further upward movement in scrap prices in the near term.

Regional comparison

The Jalna market in western India witnessed mixed price movements, with billet prices declining by INR 200/t to INR 44,500/t, while rebar prices increased marginally by INR 100/t to INR 51,500/t. Meanwhile, HMS (80:20) scrap prices held steady at INR 33,000/t. Market participants noted that trading activity in steel products has improved over the past couple of days. However, due to ongoing commercial gas supply issues, which are affecting scrap processing operations, market sources indicated that scrap prices may witness an upward movement in the coming days.

Outlook

Scrap prices in the Chennai market are likely to remain stable to firm in the coming sessions. Improved demand for billets and steady rebar consumption from project segments are supporting mill sentiment. At the same time, higher processing costs and limited imported scrap bookings may tighten supply conditions. As a result, scrap prices are expected to move within a narrow range with a slight upward trend.