India: BigMint's ferrous scrap index increases by INR 200/t ($2.40/t)
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According to BigMint's ferrous scrap index on 20 March, 2024, domestic end-cutting scrap prices in the Mandi Gobindgarh steel market rose by INR 200/t to reach INR 36,800/t DAP. Additionally, steel ingot prices in the region experienced a rise of INR 200/t to INR 42,300/t d-o-d, while rebar (Fe500) prices climbed by INR 100/t to INR 46,700/t. Today's market exhibited improved trade activity compared to yesterday's session.
A market participant informed: "Today's north scrap prices are experiencing an upward correction, primarily due to stringent inspections occurring at state check posts. As a result, local scrap suppliers are obtaining an additional premium for their scrap. This heightened scrutiny at state check posts likely creates challenges in transporting scrap materials across borders, leading to a reduction in the overall supply of scrap in the market. Consequently, local suppliers are able to command higher prices due to the increased demand and limited availability of scrap materials."
Raw material price update
In Mandi, sponge iron (CDRI) prices increased by INR 200/t to INR 31,000/t, driven by improved trade activity attributed to a slower arrival of steel scrap from nearby states. Meanwhile, pig iron (steel grade) prices in Ludhiana remained unchanged at INR 38,900/t on a DAP basis.
Overview of other markets
BigMint's assessment revealed a rise of INR 200/t ($2.40/t) in ship-breaking melting scrap prices in Gujarat's Alang market on 20 March, 2024. The HMS (80:20) prices stood at INR 34,000/t ($409/t) ex-yard. There was moderate trade activity observed for semi-finished steel during the later hours of trading yesterday in the region. Furthermore, suppliers adjusted their offers today in response to decent buying inquiries for scrap from the Bhavnagar-based IF steel mills.
In the Raipur steel market today, there was a mixed trend observed. Billet prices rose by INR 100/t, reaching INR 39,600/t, while rebar prices declined by INR 200/t to INR 42,700/t. Additionally, there were marginal increases seen in raw material prices, with sponge iron (PDRI) prices going up by INR 50/t to INR 26,500/t. Conversely, pig iron prices fell by INR 50/t to INR 37,200/t.
Imported scrap market
Indian buyers persisted in their disinterest towards imported scrap owing to the higher costs compared to the domestic scrap market. Shredded scrap from the US and Europe was quoted within the range of $400-410/t CFR.
As per a trader source, "Buyers are hesitant to procure imported scrap due to the availability of more economical options in the domestic market. The impending election and the Holi festival have also influenced market sentiments."
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 $373/t-$377/t, equivalent to around INR 33,571/t (including freight charges). Meanwhile, local scrap prices for HMS (80:20) in Mumbai remained constant, settling at INR 33,000/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.
To see BigMint's melting scrap assessment, pricing methodology and specification documents, Click here
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