India: BigMint's ferrous scrap index drops by INR 1,100/t w-o-w -12 Sept 2024
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- Sponge iron prices remain on hold for last 5 days
- Semis, finished steel prices continue to slide
BigMint's domestic end-cutting scrap index tracking the Mandi Gobindgarh market saw a price reduction of INR 300/tonne (t), settling at INR 35,900/t DAP today. On a weekly basis, Mandi scrap prices have dropped by INR 1,100-1,500/t due to muted demand.
The steel market continues to contract as weak demand for semi-finished and finished steel persists, with prices steadily declining over the past three months. Scrap procurement in Mandi remained sluggish due to ongoing bid-offer disparities, resulting in only need-based purchasing. Scrap suppliers are also facing pressure as mills have lowered their buying prices, further tightening market conditions.
A mill owner in Mandi commented that the current ingot prices, hovering around INR 41,000/t, are likely the market's bottom line. He added that if prices drop further, the mill may need to consider production cuts or even a complete shutdown to manage the situation.
Raw materials overview
Sponge iron (CDRI) prices remained stable at INR 29,800/t DAP in Mandi, holding this level for the past five days amid moderate trading. As major mills hold off on scrap purchases, sponge iron consumption has increased in their production processes.
Steel market
In the Mandi region, steel ingot prices decreased by INR 100/t to INR 41,000/t during the price reporting and normalisation phase. Meanwhile, prices in other key markets declined by INR 100/t to INR 450/t, with the most significant drop observed in the Rourkela steel market, where semi-finished steel prices fell by INR 450/t.
Rebar (Fe500) prices in Mandi fell by INR 200/t, settling at INR 45,800/t exw, as market activity experienced a dip in trade inquiries. Rebar prices have been steadily declining over the past three months.
Overview of Alang market
Gujarat's Alang market saw a reduction in ship-breaking melting scrap prices by INR 500/t on 12 September, with HMS (80:20) now at INR 33,500/t ex-yard, as per BigMint. Weak demand for semi-finished and finished steel, combined with limited scrap trade, caused suppliers to lower their offers, while major markets faced considerable bid-offer gaps. On a weekly basis, HMS (80:20) scrap prices decreased by INR 500/t in the region.
Price highlights
End-cutting-billets spread: In Mandi, the end-cutting scrap and billet spread was at INR 5,100/t.
Domestic vs imported scrap: Imported melting scrap prices at the Nhava Sheva Port were at $370-$375/t, which equates to approximately INR 33,691/t (including freight). Meanwhile, local scrap HMS (80:20) prices in Mumbai remained stable at INR 32,500/t DAP. In India, indicative prices of shredded scrap from Europe stood around $390-$395/t CFR Nhava Sheva.
Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stood at INR 12,300/t.
To see BigMint's melting scrap assessment, pricing methodology and specification documents, Click here
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