India: BigMint scrap index falls further by INR 600/t - 22 Oct'24

• Index falling for three consecutive days
  
  
• Sponge prices fall by INR 300/t d-o-d
  
  
• Finished steel demand hit by GST raids
  
  

BigMint's domestic end-cutting scrap index, tracking the Mandi Gobindgarh market, slipped further by INR 600/tonne (t) d-o-d to INR 37,000/t DAP on 22 October 2024. Scrap prices have witnessed a downtrend in the region over the last three days.

A mill owner informed BigMint: "Cautious buying conditions and discrepancies between bids and offers have been observed in the ferrous scrap market. Over the past two working days, scrap prices have fallen by INR 1,000-1,400/t. Mills are under pressure due to weak sales in finished products, and they are currently procuring scrap only when necessary. Additionally, demand for steel from neighbouring states is sluggish as well."

In the Mandi steel market, limited demand for semi-finished and finished steel can be attributed to disruptions in trade because of GST inspections. Moreover, with adequate inventory levels at mills, pressure has increased, forcing them to lower their offers today.

Raw materials scenario

Today, prices of sponge iron (CDRI) in the Mandi market declined by INR 300/t to INR 33,000/t DAP. In contrast, pig iron (steel-grade) in Ludhiana remained stable at INR 39,500/t DAP.

Steel market overview

Steel ingot prices in Mandi dipped by INR 400/t d-o-d to INR 43,100/t DAP during the price reporting and normalisation phase. Prices of semi-finished steel across multiple key markets dropped by INR 400/t d-o-d to INR 900/t, while the Mumbai steel market witnessed a marked decrease of INR 900/t in the same time-frame.

Rebar (Fe 500) prices in the Mandi market declined by INR 300/t to INR 48,300/t exw today, as trading activity was weaker d-o-d.

Overview of Mumbai market

Mumbai's IF-route rebar (Fe 500) prices decreased d-o-d by INR 700 to INR 47,800/t exw. Due to an unclear market trend, buyers are restricting themselves from bulk bookings. Hence, the market has only seen need-based buying in finish steel. However scrap (HMS 80:20) prices stand at INR 32,800/t DAP. The conversion spread from scrap to billet is hovering at INR 8,900/t.

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 34,570/t (including freight). Local scrap HMS (80:20) in Mumbai fell by INR 400/t d-o-d to INR 32,800/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 13,150/t.

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