India: BigMint's ferrous scrap index falls INR 1,300/t w-o-w - 16 Sept'24

• Sponge iron prices edge down by INR 200/t d-o-d
  
  
• Semis, finished steel prices witness INR 200-400/t drop
  
  

BigMint's domestic end-cutting scrap index tracking the Mandi Gobindgarh market fell INR 300/t to INR 35,500/t DAP today. W-o-w, scrap prices in the region dropped INR 1,200-1,400/t, with limited buying interest from mills.

A mill owner informed BigMint: "Buyers are delaying purchases in the expectation that ingot prices will fall to around INR 40,500/t in the near term. Sellers, however, believe the bottom range to be around INR 40,700-40,800/t. Simultaneously, scrap prices are also anticipated to decline following the trend in ingot prices."

Raw materials overview

Sponge iron (CDRI) prices dropped INR 200/t to INR 29,600/t DAP in Mandi. Meanwhile, pig iron (steel grade) prices in Ludhiana remained unchanged at INR 38,000/t DAP.

Sponge iron consumption has surged in the Mandi Gobindgarh steel market leading to a sharp decline in prices over the past two months. Meanwhile, scrap prices have also consistently dropped as bid-offer disparities persist, which has created creating ongoing challenges for mills in procuring scrap.

A mill owner informed: "In recent days, major steel mills have been using a mix of around 70% scrap and 30% sponge iron in their production process, while medium and small mills are opting for a blend of 60% scrap and 40% sponge iron for steel making".

Raw material prices have continued their steady decline over the past few months.

Steel market

In the Mandi region, steel ingot prices fell by INR 200/t to INR 40,700/t during the price reporting and normalisation phase. Meanwhile, prices in other key markets decreased by INR 100/t to INR 300/t. But the most notable fall was seen in the Ludhiana steel market as semis prices moved down by INR 300/t d-o-d.

Rebar (Fe500) prices in Mandi decreased by INR 400/t to INR 45,500/t exw, On a weekly basis, prices dropped by INR 700/t, driven by sluggish demand for finished steel.

Rebar prices have experienced a consistent decline over the past few months.

Overview of Jalna Steel market

In the Jalna market of Western India, billet and rebar prices have maintained stability, assessed at INR 39,800/t and INR 44,600/t, respectively. However, HMS 80:20 scrap prices have experienced a decline, falling by INR 100/t to INR 32,400/t. Industry sources suggest that, finished steel demand remains at an average level. The consumption of scrap in local mills has dropped, primarily due to increased usage of sponge iron and a reduction in rebar production.

Price highlights

End-cutting-billets spread: In Mandi, the end-cutting scrap and billet spread was at INR 5,200/t.

Domestic vs imported scrap: Imported melting scrap prices at the Nhava Sheva Port were at $365-$370/t, which equates to approximately INR 33,244/t (including freight). Meanwhile, local scrap HMS (80:20) prices in Mumbai remained stable at INR 32,300/t DAP. In India, indicative prices of shredded scrap from Europe stood around $385-$390/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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