India: BigMint's ferrous scrap index edges up despite soft steel demand

• Raw materials, steel prices remain unchanged
  
  
• Finished steel prices expected to remain rangebound
  
  

BigMint's domestic end-cutting scrap index, tracking the Mandi Gobindgarh market, rose marginally by INR 100/t to INR 37,500/t DAP on 12 November 2024. Scrap prices saw a slight increase, but trade activity in semi-finished and finished steel remained limited today.

In the near term, the outlook for steel demand appears moderate. Work activity, which had paused during the festive weeks, is gradually resuming, which may support a steady recovery in demand. However, the market remains cautious amidst these mixed signals and on weekly basis semi-finished and scrap prices increased by INR 1,000-1,800/t.

Raw materials scenario

Today, sponge iron (CDRI) prices in Mandi remained stable at INR 32,000/t DAP. Meanwhile, pig iron (steel-grade) prices in Ludhiana dipped INR 200/t to INR 39,400/t DAP.

Raw material charge mix

Mandi Gobindgarh

Scrap usage: 80%-85%

Sponge iron usage: 15%-20%

Ludhiana

Busheling scrap: 90%-95% (for special steel grades)

Steel market overview

Steel ingot prices in Mandi remained stable at INR 43,000/t DAP during today's price reporting and normalisation. Semi-finished steel prices across markets similarly decreased by INR 50/t to INR 200/t compared to the previous day.

Today, rebar (Fe 500) prices in Mandi remained steady at INR 47,600/t ex-works. However, trade activity remains steady but somewhat restrained, with buyers exhibiting caution at these elevated price levels.

Ship-breaking scrap market

On 12 November, ship-breaking melting scrap prices in Gujarat's Alang market saw a decline of INR 200/t d-o-d. According to BigMint's latest assessment, HMS (80:20) prices were reported at INR 35,300/t ex-yard. The regional market witnessed need-based buying in both semi-finished and finished steel during yesterday's trading session. Additionally, moderate trade activity in scrap prompted suppliers to adjust their offers downward today, reflecting a softer market sentiment.

Jalna market

In the Jalna market, billet prices dropped INR 200/t to INR 42,300/t, and rebar prices fell by INR 100/t to INR 47,300/t, while HMS 80:20 scrap prices held steady at INR 33,200/t. Rebar trade activity has slowed down, and though mills have enough scrap inventory, liquidity concerns driven by the ongoing local assembly elections are affecting overall market sentiment.

Price highlights

End-cutting-billets spread: In Mandi, the end-cutting scrap and billet spread was at INR 5,600-5,900/t.

Domestic vs imported scrap: Imported melting scrap prices at Nhava Sheva Port were at $370-380/t, which equates to approximately INR 34,271/t (including freight). Local scrap HMS (80:20) in Mumbai decreased by INR 100/t to INR 33,400/t DAP. In India, indicative prices of shredded from Europe stood at $400-$405/t CFR Nhava Sheva.

India's demand for imported scrap remained subdued today, with end-users showing limited buying interest due to high inventories of finished steel, keeping production levels at around 80-90%.

Raipur sponge iron-billet spread: The conversion spread (margin) between pellet-based DRI (P-DRI) and steel billets in Raipur stood at INR 13,400/t.

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