India: BigMint's ferrous scrap index falls to nearly 3-week low -2 Sept'24

• Sponge iron prices down INR 100/t d-o-d
  
  
• Semis and finished steel prices continue to drop
  
  

BigMint's domestic end-cutting scrap index tracking the Mandi Gobindgarh market fell by INR 200/tonne (t) to INR 36,800/t DAP on 2 Sept, 2024. The market is facing low demand and weak trading resulting in a steady drop in semi-finished and finished steel prices.

Today, scrap prices are approached their lowest point in three weeks. The last recorded low was on 8 August, 2024, when end-cutting scrap prices were at around INR 36,900/t.

According to a mill owner, near-term prices are expected to remain rangebound, with ingot prices currently fluctuating between INR 41,200/t and INR 42,400/t. This stability in prices comes amid a lack of significant trading activity this week, as global demand remains sluggish and raw material prices have hit a low.

The market has encountered a minor shortage of specific scrap grades, which has been further exacerbated by supply issues at the supplier's end. The market is experiencing a minor shortage of certain scrap grades, worsened by supply issues from suppliers. This situation is attributed to the current unviability of imported scrap leading mills to concentrate on domestic sources.

Raw materials overview

The absence of imported scrap, bid offer disparities led to a marked increase in the reliance on sponge iron over the last few months. In Mandi, sponge iron (CDRI) prices slightly decreased by INR 100/t to INR 29,900/t. On the other hand, Ludhiana pig iron (steel grade) prices remained steady at INR 39,300/t DAP.

Steel market

In the Mandi region, steel ingot prices decreased by INR 150/t to INR 41,500/t during the price reporting and normalisation phase on Friday. However, prices in other key markets dipped INR 100 to INR 300/t. The Raipur steel market experienced a notable decline today, with ingot prices dropping by INR 300/t.

Rebar (Fe500) prices dipped INR 100/t to INR 46,300/t today amid slow trade activity.

Overview of other markets

On 2 September, ship-breaking melting scrap prices in Gujarat's Alang market fell by INR 200/t from the previous day. BigMint's evaluation set the HMS (80:20) price at INR 33,800/t ex-yard. Limited trading activity in semi-finished and finished steel was noted in the last trading session, and the reduced average trade in scrap led to a decrease in suppliers' offers today.

Price highlights

End-cutting-billets spread: In Mandi, the end-cutting scrap and billet spread was at INR 4,700-5,000/t.

Domestic vs imported scrap: Imported melting scrap prices at Nhava Sheva Port were at $370-$375/t, which equates to approximately INR 33,622/t (including freight). Meanwhile, local scrap, HMS (80:20), prices in Mumbai remained stable at INR 32,500/t, unchanged from last week. In India, indicative prices of shredded scrap from Europe stood at $385-$395/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 13,350/t.

To see BigMint's melting scrap assessment, pricing methodology and specification documents, Click here

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