Steel scrap rates take a hit, traders jittery in Ludhiana

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Businessmen said the drop in rates of steel like ingot, hard rolled (HR) coil has caused reduction in rates of scrap.

Ludhiana: Steel scrap traders of Ludhiana have been jittery in view of frequent drop in rates of scrap in the past few months.

Traders said the rate fluctuation is impacting their businesses. Anticipating further drop in rates, the customers are only doing spot buying unlike earlier times when they used to buy scrap in bulk quantity to last for three to four production cycles. Businessmen said the drop in rates of steel like ingot, hard rolled (HR) coil has caused reduction in rates of scrap.

Gurjot Singh Batra, chairman of Ludhiana Scrap Trades Association (LSTA), said, “The rate of per tonne of steel scrap which was about Rs 47,500 last month has dropped to Rs 44,000. We have been witnessing this fluctuation in rates for quite some time now, because of which scrap traders are suffering huge losses.”

“We have to purchase stock in bulk to cater to the demand and as of now every trader has huge quantities of scrap purchased at very high rates and now with the drop of Rs 3,500 per tonne in last 30 days alone, a huge amount of money of ours has gone down the drain. We are helpless as we cannot do anything except for waiting for the rates to stop fluctuating,” Batra added.

Jarnail Singh Bantu, president of the LSTA, said, “Rates of scrap have fallen because prices of steel material like ingot and HR coil too have dropped. The current rate of ingot is Rs 56,000 per tonne which was in the range of Rs 51,000 per tonne a month ago. Similarly, the rate of HR coil is about Rs 54,000 per tonne which was approximately Rs 57,000 last month. Since these both materials are made out of scrap, the rate of scrap is co-related with their rates.”

“But the situation for scrap dealers is worrysome as due to rate fluctuation, our sales have also taken a hit because buyers are not buying scrap in bulk like earlier occasions. They are anticipating further reduction in rates,” he added.

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