India: BigMint's ferrous scrap index stable despite weak steel demand

• Sponge iron prices drop by INR 100/t
  
  
• Semis, finished steel prices dip INR 100-300/t d-o-d
  
  

BigMint's domestic end-cutting scrap index, tracking the Mandi Gobindgarh market, remained stable at INR 38,300/t DAP on 17 October 2024. In the scrap segment, moderate trading inquiries were noted in the Mandi steel market, as mills focused on sourcing domestic steel scrap. The semi-finished and finished steel markets faced a decline in trade activity during today's trading session.

A mill owner informed: "A few factors are hindering the Mandi steel market. The first is the rigorous GST inspections at the border. Next, the slow arrival of scrap neighbouring states, which is a concern. Additionally, many small and medium scrap traders are hesitant to work under the RCM method, and there is a slight decrease in the trade of finished steel noticed over the from last three days".

Raw materials scenario

The price of sponge iron (CDRI) in the Mandi market has dipped by INR 100 to INR 33,700/t DAP. Conversely, prices for pig iron (steel-grade) in Ludhiana remained stable at INR 40,000/t DAP.

Steel market overview

Steel ingot prices in Mandi decreased by INR 300/t to INR 44,000/t DAP during the price reporting and normalisation phase. Prices across other significant markets fell by INR 50 to INR 400/t from the previous day, with the semi-finished steel markets in Ahmedabad and Ludhiana seeing a marked decline of about INR 400/t.

Today, rebar (Fe 500) prices in the Mandi market decreased by INR 200/t to INR 48,800/t exw, in response to a sluggish market trend.

Overview of Alang market

On 17 October, 2024, the prices for ship-breaking melting scrap in Alang, Gujarat, were stable compared to the previous day. According to BigMint's assessment, HMS (80:20) was priced at INR 34,500/t ex-yard. Although semi-finished steel prices dropped in yesterday's trading, the moderate buying interest from IF steel mills in Bhavnagar prompted suppliers to maintain their pricing today.

Price highlights

End-cutting-billets spread: In Mandi, the end-cutting scrap and billet spread was at INR 5,700/t.

Domestic vs imported scrap: Imported melting scrap prices at Nhava Sheva Port were at $376/t, which equates to approximately INR 33,807/t (including freight). Local scrap HMS (80:20) prices in Mumbai fell by INR 100/t d-o-d to INR 33,700/t DAP. In India, indicative prices of shredded scrap from Europe stood at $394-$398/t CFR Nhava Sheva.

India's ferrous scrap imports slides by 12% to 0.76 mnt in Sep'24 from 0.86 mnt in Aug'24, according to provisional data from BigMint. Y-o-y, imports dropped 10% from 0.84 mnt in Sep'23.

Raipur sponge iron-billet spread: The conversion spread (margin) between pellet-based DRI (P-DRI) and steel billets in Raipur stood at INR 13,400/t.

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