On October 30, Indian domestic insert scrap quotes were 111% of their FOB-equivalent value in rupees. A week earlier they were 95%. Domestic buyers are paying more than the export price. The reason sits in how the two prices are formed.
What export parity means
Export parity is the FOB dollar price multiplied by the dollar-rupee rate. It is what an exporter would receive per kilo before freight and costs. If a domestic buyer pays more than that, selling at home beats exporting for the same grade.
| Insert scrap, India, Oct 23 to Oct 30 | Change |
|---|---|
| Domestic quote (rupees) | +16.7% |
| FOB (dollars) | 0.0% |
| Dollar-rupee rate | +0.1% |
| Domestic quote as share of FOB-equivalent | 95% to 111% |
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. Company figures are as reported by the companies and summarised here. 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.
Why the two diverge
- The FOB print is thin. Sellers are holding back, so few offers clear. The weekly assessment moves on whatever trades.
- Domestic buyers follow China. China’s carbide scrap rose 31% off its October low, and Indian domestic buyers priced it in faster.
- The premium inverted. India FOB drill is now 3.5% below China drill scrap, against 42.7% on October 15. See WolfTrack Issue #5.
- The rupee did not drive it. The dollar-rupee rate moved about 0.1% over the week.
What to check before you quote
- Compare like with like: same grade, same purity, same payment terms.
- Parity here is gross. Freight, export costs and GST treatment change the real comparison.
- A domestic quote above parity is a quote, not a trade. Confirm it against firm bids.
- An FOB buyer wanting documented origin may still pay for papers a domestic buyer does not ask for. See Tungsten scrap is going strategic.
Parity gaps this size have been uncommon this year, and the record so far is that premiums open and close with the China price. This is an observation of where prices stand, not a view on where they go.
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