On October 23 India’s FOB premium over China drill scrap was 8.9%, against a median of 23% since April. On the surface that says the Indian premium is over. The data from the past six months says something narrower: the premium is closed today, and every earlier time it closed this year it was open again within ten sessions.
What the premium is
It is the India FOB drill-bit assessment divided by China’s drill scrap price, minus one. India FOB is assessed once a week, on Thursday, and moves in steps. China’s price prints daily. That mismatch is why the premium swings so widely.
Where it has been
| Date | Premium | What was happening |
|---|---|---|
| Apr 10 | 7.2% | Both markets near their April highs |
| May 25 | 40.9% | China scrap low before the late-May rally |
| Jun 10 | -0.5% | China scrap at its June peak |
| Jun 11 | 29.7% | India FOB stepped up one assessment later |
| Jul 14 | 47.3% | China scrap fell, India FOB held |
| Aug 20 | 19.3% | Flat period |
| Sep 30 | 20.3% | Before the October fall |
| Oct 14 | 59.3% | Widest of the year |
| Oct 23 | 8.9% | Now |
Prices compiled from publicly available market information and our own transaction data. No third-party source, platform, or company is represented as the basis for any rate shown. Moves are percentage changes. Information only — not a buy/sell recommendation and not a price forecast. Trading involves risk of loss. Consult a qualified professional before trading and verify independently.
Of 131 sessions with both prints, only about one in seven (14.5%) had a premium lower than today’s.
The three earlier closures
| Period below 10% | Sessions | Premium ten sessions later | Why it reopened |
|---|---|---|---|
| Apr 2–17 | 9 | 12% to 46% | China scrap fell 19–29% while India FOB held |
| Jun 1–10 | 8 | 21% to 24% | India FOB stepped up 13–29% to follow China’s rally |
| Sep 17–18 | 2 | 42% to 48% | China scrap fell 29–32% |
| Oct 23 | 1 so far | Open question | — |
In all three cases the premium reopened, but for opposite reasons. When China fell, the premium reopened because Indian offers lagged the fall. When China rose, it reopened because India FOB stepped up to catch the rise. The premium did not stay closed in either direction.
What this means
- Reading, not regime. A premium of 8.9% is a reading on one day. Three prior readings below 10% did not hold for a fortnight.
- The next test is the Thursday, October 29 assessment. If China is flat, the premium roughly holds. If China moves, the premium moves with it until India FOB steps.
- Domestic rupee quotes are already ahead. The domestic insert quote rose from about 80% to about 95% of the FOB-equivalent value between October 15 and October 23, while FOB fell. Domestic buyers are paying more rupees as the dollar FOB falls.
- The question to ask is no longer how big the premium is. It is what the premium is paid for. Buyers tied to Western groups are asking for documented non-Chinese origin; see Tungsten scrap is going strategic.
Caveat: this is one year of data with three prior closures. It is a pattern, not a law. Weekly assessments are in WolfTrack Issue #4.
