India: BigMint's ferrous scrap index declines by INR 600/t amid muted steel market-21 Oct

• Raw material prices continue to drop
  
  
• Semis prices fall by INR 400/t d-o-d
  
  

BigMint's domestic end-cutting scrap index, tracking the Mandi Gobindgarh market, moved down by INR 600/t d-o-d to INR 37,600/t DAP on 21 October 2024. Muted demand for steel exerted downward pressure on mills, leading to a slowdown in their scrap purchasing capacity due to high inventory levels. This situation put Mandi scrap suppliers in a predicament, who reduced their prices today by INR 300-800/t to stimulate sales.

A mill owner informed BigMint, "The Mandi steel market is currently under pressure due to limited demand for finished steel, compounded by inventory challenges faced by major mills. This trend has led to a decline across all steel segments over the past few days. Additionally, the upcoming festive season poses an added burden for mills regarding labour payments and bonuses. GST checks are also contributing to restricted trade activity in the market. Overall, the market shows signs of slowing down in the near term."

Raw materials scenario

Today, prices of sponge iron (CDRI) in the Mandi market declined by INR 200/t to INR 33,300/t DAP. In contrast, pig iron (steel-grade) in Ludhiana fell by INR 300/t to INR 39,500/t DAP.

Steel market overview

Steel ingot prices in Mandi edged up by INR 400/t d-o-d to INR 43,600/t DAP during the price reporting and normalisation phase. Prices of semi-finished steel in various major markets declined by INR 200/t d-o-d to INR 700/t, while the Rourkela steel market reported a significant decrease of INR 700/t d-o-d.

Today, rebar (Fe 500) prices in the Mandi market dipped by INR 100/t d-o-d to INR 48,600/t, with modest trade activity observed.

Overview of other markets

On 21 October 2024, prices of ship-breaking melting scrap in Gujarat's Alang market fell by INR 300/t compared to the previous day. BigMint's assessment indicated that HMS (80:20) prices were INR 34,200/t ex-yard. The previous trading session featured only need-based transactions in semi-finished and finished steel, and the overall drop in scrap trading activity led suppliers to reduce their offers today.

Price highlights

End-cutting-billets spread: In Mandi, the end-cutting scrap and billet spread was at INR 6,000-6,100/t.

Domestic vs imported scrap: Imported melting scrap prices at Nhava Sheva Port were at $380-$385/t, which equates to approximately INR 34,567/t (including freight). Local scrap HMS (80:20) in Mumbai fell by INR 400/t d-o-d to INR 33,200/t DAP. In India, indicative prices of shredded from Europe stood at $395-$400/t CFR Nhava Sheva.

Raipur sponge iron-billet spread: The conversion spread (margin) between pellet-based DRI (P-DRI) and steel billets in Raipur stood at INR 13,100/t.

To check BigMint's melting scrap assessment, pricing methodology, and specification documents, click here.