India: BigMint's ferrous scrap index falls by INR 500/t on slow market trend

BigMint's index for domestic steel scrap (end-cutting) in Mandi Gobindgarh recorded a drop of INR 500/t on 18 March, 2024, reaching INR 36,400/t on a delivered-at-plant (DAP) basis.

According to market sources, "The primary reason behind the decline in scrap prices is attributed to the implementation of a code of conduct for the upcoming Lok Sabha elections. The reduction in cash transactions has affected small-scale operators and disrupted the supply chain."

In Mandi, prices of steel ingot dropped by INR 400/t, settling at INR 42,000/t during reporting and price normalisation. Meanwhile, prices in various notable markets exhibited a downturn ranging between INR 100/t and INR 400/t today.

In Mandi, the steel market encountered sluggish trade activity as buyers remained on the sidelines throughout the day. The market sentiment was characterised by anticipation for potential decreases in semi-finished steel prices.

Overview of other markets

Alang: Ship-breaking melting scrap prices in Gujarat's Alang increased by INR 300/t d-o-d on 18 March, 2024, as per BigMint's assessment. HMS (80:20) prices were assessed at INR 33,800/t exy. Active buying enquiries in the semi-finished and finished steel segments in key markets of the region in the last trading session, and moderate trading activity in the scrap sector, prompted suppliers to increase prices today.

Chennai: In the Chennai market, located in South India, prices of semi-finished, finished steel, and HMS 80:20 remained stable, assessed at INR 43,500/t, INR 47,500/t, and INR 32,200/t, respectively. According to market sources, demand in finished steel was at a moderate level, although steel prices may see some downward price movement in coming days amid the upcoming Holi festival.

Price highlights

End-cutting and billets spread: In Mandi, the end-cutting scrap and billets spread was at INR 5,000-5,500/t.

Domestic vs imported scrap: The imported melting scrap prices at Nhava Sheva Port stood at approximately $370/t-$375/t, equivalent to around INR 33,300/t (including freight charges). Meanwhile, local scrap prices for HMS (80:20) in Mumbai fell by INR 200/t to INR 33,300/t d-o-d.

Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stood at INR 13,100/t.

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