India: BigMint scrap index drops by INR 200/t amid mixed sentiments-16 Oct

• Raw material prices witness mix trend
  
  
• Semis, finished prices remain stable d-o-d
  
  

BigMint's domestic end-cutting scrap index, tracking the Mandi Gobindgarh market, dipped by INR 200/tonne (t) d-o-d to INR 38,300/t DAP on 16 October 2024.

Today, fluctuations in scrap prices were observed in the Mandi steel market. Certain grades of scrap experienced a decline, while others saw an increase. Steel mills in the area maintained their regular purchasing activities, operating at approximately 80-90% production capacity. Although the arrival of scrap was somewhat slower due to ongoing GST inspections, there has been no indication of a shortage in the market as major steel mills have sufficient raw material inventories although the small and medium ones see limited volumes in stock. Overall, the market appears to be stabilising despite the mixed price movements. In the near term, ingot prices are expected to stay between INR 44,000/t to INR 44,500/t, as mills remain optimistic.

Raw materials overview

Sponge iron (CDRI) prices in the Mandi market marginally slipped by INR 100/t to INR 33,800/t DAP. In contrast, pig iron (steel-grade) prices in Ludhiana remained stable at INR 40,000/t DAP.

Steel market overview

Steel ingot prices in Mandi remained stable at INR 44,300/t DAP during the price reporting and normalisation phase. Prices in other significant markets increased by INR 100/t to INR 300/t from the previous day, with a notable rise of about INR 300/t observed in Muzaffarnagar's semi-finished steel market.

Today, rebar (Fe 500) prices in Mandi remained steady at INR 49,000/t exw, amid moderate market trends.

Overview of others markets

Alang: On 16 October, 2024, ship-breaking melting scrap prices in Alang, Gujarat, remained unchanged. According to BigMint's evaluation, HMS (80:20) prices were at INR 34,500/t ex-yard. The previous trading session saw a moderate level of transactions in semi-finished and finished steel in the area. Furthermore, strong demand from mills in Bhavnagar encouraged suppliers to keep prices stable today.

Mumbai: Prices of induction furnace (IF)-route rebar (Fe 500), ex-Mumbai, remained stable at INR 48,800/t exw. Limited trade activity was seen in the market for finished steel. The current pricing of scrap (HMS 80:20) is at INR 33,800/t DAP. Conversion spread between scrap and billet is at around INR 9,800/t.

Price highlights

End-cutting-billets spread: In Mandi, the end-cutting scrap and billet spread was at INR 5,700-6,000/t.

Domestic vs imported scrap: Imported melting scrap prices at Nhava Sheva Port were at $377/t, which equates to approximately INR 33,879/t (including freight). Local scrap HMS (80:20) prices in Mumbai fell by INR 100/t d-o-d to INR 33,800/t DAP. In India, indicative prices of shredded scrap from Europe stood at $395-$400/t CFR Nhava Sheva.

A buyer from southern India noted, "We have cut imports by 30% and shifted towards local scrap, which is more favourable. We will increase this reliance over the next month."

Meanwhile, a primary steel producer was reported to have booked about 10,000 t of mixed US scrap, including shredded, at $400-405/t CFR Vizag and CR busheling at around $415/t CFR.

Raipur sponge iron-billet spread: The conversion spread (margin) between pellet-based DRI (P-DRI) and steel billets in Raipur stood at INR 13,500/t.

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