India: BigMint's ferrous scrap index falls for third consecutive day
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- Scrap shortage, price disparity persist in Mandi market
- Mills increase share of sponge iron in feed mix
BigMint's domestic end-cutting scrap index tracking the Mandi Gobindgarh market decreased by INR 300/t to INR 38,300/t DAP on 19 July, 2024. Scrap prices continued to move down for the third straight day amid limited buying by the mills.
A steelmaker informed: "Steelmakers in Mandi are facing challenges due to lacklustre demand for semi-finished and finished steel. Additionally, bid disparities between scrap buyers and sellers persist in the market. The majority of small and medium-scale steel mills have cut their production levels due to shortage of scrap and dull demand; moreover, consumption of sponge iron in the charge mix for steel making has increased in Mandi. It is currently around 65-70% scrap and 35-30% sponge iron."
Raw materials overview
Sponge iron (CDRI) prices in Mandi fell by INR 300/t to INR 30,200/t. Additionally, pig iron (steel grade) prices in Ludhiana fell by INR 200/t to INR 40,200/t DAP.
Steel market
In the Mandi region, steel ingot prices decreased by INR 300/t to INR 43,300/t today during the price reporting and normalisation phase. Meanwhile, prices in other key markets moved down by INR 100/t to INR 400/t.
Rebar (Fe500) prices fell by INR 400/t to INR 48,000/t amid subdued market activity.
Overview of other markets
In the Jalna market in western India, semi-finished steel prices decreased by INR 300/t to INR 41,500/t, and finished steel prices fell by INR 300/t to INR 46,200/t. HMS 80:20 prices dropped by INR 100/t to INR 33,000/t. Market sources indicate that the demand for finished steel is limited, and if this trend continues, mills might consider production cuts. The arrival of domestic scrap is moderate, but mill owners are offering lower prices for scrap purchases.
Price highlights
End-cutting-billets spread: In Mandi, the end-cutting scrap and billets spread was at INR 5,000-5,500/t.
Domestic vs imported scrap: Imported melting scrap prices at Nhava Sheva Port were at around $387-$392/t, which equates to approximately INR 35,008/t (including freight), while local scrap, HMS (80:20), prices in Mumbai remained stable at INR 33,300/t today. In India, indicative prices of shredded scrap from Europe stood at $411-$416/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 13,450/t.
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