India: BigMint's scrap index falls by INR 300/t d-o-d amid weak market sentiments

• Mills slash production amid high finished stocks
  
  
• Alternative raw material prices dip INR 100-200/t
  
  

BigMint's domestic end-cutting scrap index, tracking the Mandi Gobindgarh market, decreased by INR 300/tonne (t) d-o-d to INR 35,600/t DAP on 2 December 2024.

The Mandi steel market remains under pressure due to subdued demand. Scrap prices declined by INR 600-800/t this week, mirroring similar dips in semi-finished and finished steel. Mills are facing selling pressure as finished steel inventories remain high, prompting many to cut back on routine production to manage stock levels.

A scrap supplier stated, "Due to sales pressure, mills are delaying payments, as liquidity challenges persist in the Mandi steel market. However, scrap suppliers are prioritising mills with consistent cash flow and those who make timely payments without delays."

Raw materials scenario

Sponge iron (CDRI) prices in Mandi decreased by INR 200/t d-o-d to INR 30,200/t DAP today. Meanwhile, pig iron (steel-grade) tags in Ludhiana fell by INR 100/t d-o-d to INR 36,900/t DAP.

Steel market overview

Steel ingot prices in Mandi dipped INR 300/t d-o-d to INR 41,100/t DAP during the market reporting and normalisation phase. Semi-finished steel prices across markets decreased by INR 100-400/t d-o-d.

Rebar (Fe 500) prices in Mandi declined by INR 300/t d-o-d to INR 45,800/t exw amid limited trade.

Overview of other markets

In the Jalna market, billet prices moved down by INR 200/t d-o-d to INR 40,500/t, while rebar saw an increase of INR 200/t d-o-d to INR 46,000/t. Conversely, HMS 80:20 scrap dropped by INR 400/t d-o-d to INR 32,000/t.

According to market sources, the second half of today's trading session saw a rise in trade activity in the finished steel sector. Mills had booked a significant amount of scrap at higher prices last week but reduced their purchase prices in today's session. At the same time, scrap supply to mills was slow today.

Ship-breaking melting scrap prices in Alang, Gujarat, held steady d-o-d at INR 34,500/t ex-yard. Stable pricing in semi-finished and finished steel, coupled with moderate trade volumes, encouraged suppliers to maintain their current offers.

Price highlights

End-cutting-billets spread: In Mandi, the end-cutting scrap and billet spread was at INR 5,500-5,800/t.

Domestic vs imported scrap: Imported melting scrap prices at Nhava Sheva Port were at $360-365/t, which equates to approximately INR 33,108/t (including freight). Local scrap HMS (80:20) in Mumbai remained stable d-o-d at INR 32,300/t DAP. In India, indicative prices of shredded from Europe stood at $380-$385/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 13,800/t.

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