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India: BigMint's ferrous scrap index falls by INR 400/t ($4.80/t) on 14 Jun'24

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Melting Scrap

BigMint Bureau

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14 Jun 2024, 19:03 IST

India: BigMint's ferrous scrap index falls by INR 400/t ($4.80/t) on 14 Jun'24

Slow demand continues to impact steel prices

Imported scrap pressure on suppliers in Mandi

BigMint's domestic end-cutting scrap index in the Mandi Gobindgarh market dropped by INR 400/tonne (t) to INR 40,400/t DAP on 14 June, 2024. With mills facing the pressure of subdued demand in the semi-finished and finished steel markets, scrap procurement has slowed down considerably. So, mills have adjusted their offers downward and are taking control of negotiations. Scrap suppliers are grappling with the dual challenge of dwindling prices and mills' discounted offers, driven by the influx of imported scrap into the market.

Raw materials overview

In Mandi, the price of sponge iron (CDRI) experienced a notable decline of INR 500/t to INR 33,500/t, whereas prices of steel-grade pig iron in Ludhiana held steady at INR 42,300/t.

Steel market overview

Steel ingot prices in Mandi Gobindgarh fell by INR 400/t to INR 47,100/t during the price reporting and normalisation phase. Prices of semis in other major markets witnessed a decline, ranging from INR 100-500/t. The most significant drop of INR 500/t was observed in the Raigarh market. The main factor driving the decrease in prices of semi-finished and finished steel was the limited number of buyers present in the market. Despite this, mills are hopeful of a potential increase in demand in the upcoming week.

In Mandi, rebar (Fe500) prices fell by INR 100/t to INR 51,100/t today.

Overview of other markets

In the Jalna market in Maharashtra, prices of semi-finished steel decreased by INR 100/t to INR 45,200/t, while rebar prices dropped by INR 300/t to INR 51,000/t. Meanwhile, HMS 80:20 prices remained stable at INR 36,400/t. According to sources, rebar demand is limited, and scrap supply is moderate due to lower offers by mill owners. Consequently, mills are increasing the use of sponge iron due to its better viability compared to scrap.

Price highlights

End-cutting and billets spread: In Mandi, the end-cutting scrap and billets spread was at INR 5,600-5,700/t.

Domestic vs imported scrap: Imported melting scrap prices at Nhava Sheva Port were at around $395-$400/t, which equates to approximately INR 35,615/t (including freight), while local scrap-HMS (80:20)-prices in Mumbai fell by INR 400/t to INR 35,100/t d-o-d. In India, indicative prices of shredded scrap from Europe stood at $415-$420/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 stands at INR 16,200/t.