India: BigMint's ferrous scrap index dips by INR 300/t amid weak finished steel demand

• Shortage of scrap continues in Mandi
  
  
• Slow demand for finished steel to continue in Mandi
  
  

BigMint's domestic end-cutting scrap index tracking the Mandi Gobindgarh market marginally fell by INR 300/tonne (t) to INR 37,200/t DAP on 6 August, 2024. Steelmakers in Mandi are facing challenges due to lacklustre demand for semi-finished and finished steel. Additionally, bid disparities between scrap buyers and sellers persisted in the market. Mills are procuring scrap at minimal levels because of the ongoing shortage and limited steel demand.

Raw materials overview

Sponge iron (CDRI) prices in Mandi inched down by INR 200/t to INR 29,800/t DAP. Additionally, pig iron (steel grade) prices in Ludhiana were unchanged at INR 40,500/t DAP.

Steel market

In the Mandi region, steel ingot prices decreased by INR 200/t to INR 42,100/t today during the price reporting and normalisation phase. Meanwhile, prices in other key markets witnessed a mixed trend today. In the Ahmedabad steel market, semi-finished prices saw a drop of INR 300/t d-o-d.

Rebar (Fe500) prices continued to drop, prices fell by INR 300/t to INR 47,000/t with subdued market activity.

Overview of other markets

Jalna: The Jalna market in western India showed stability in semi-finished and finished steel prices at INR 40,900/t and INR 44,800/t, respectively. HMS 80:20 prices have decreased slightly by INR 100/t to INR 32,700/t. Market sources suggested that mills are considering a production cut of up to 25% in response to weak demand for finished steel. The lower scrap offers from mills are impacting the supply of scrap materials.

Price highlights

End-cutting-billets spread: In Mandi, the end-cutting scrap and billet spread was at INR 4,800-5,000/t.

Domestic vs imported scrap: Imported melting scrap prices at Nhava Sheva Port were at around $388-$395/t, which equates to approximately INR 35,000/t (including freight), while local scrap, HMS (80:20), prices in Mumbai remained constant at INR 32,700/t, today.

Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stood at INR 13,900/t.

To see BigMint's melting scrap assessment, pricing methodology and specification documents, Click here

To provide feedback on this index or if you would like to contribute by becoming a data partner, please contact - support@bigmint.co