India: BigMint's ferrous scrap index remains stable - 5 Sept'24

The Mandi steel market is experiencing a slow yet steady trend, with no significant fluctuations anticipated in the near term, according to local mill owners. The key challenges are ongoing sales pressure due to weak demand for semi-finished and finished steel, along with persistent liquidity issues that are further affecting market activity.

Mandi mills are actively sourcing domestic scrap, while buyers of imported scrap remain cautious, citing ongoing bid-offer disparities. The price difference between domestic and imported scrap continues to drive mills towards local procurement.

Raw materials overview

Sponge iron (CDRI) prices remained stable at INR 30,000/t today. Meanwhile, in Ludhiana, pig iron (steel grade) prices dropped by INR 100/t to INR 39,200/t DAP.

The last three months prices have shown a downward trend in raw material prices, influenced by slow demand and market uncertainties.

Steel market trends

In the Mandi region, steel ingot prices rose by INR 100/t to INR 41,800/t on Thursday during the price reporting and normalisation phase. Meanwhile, prices in other key markets sharply increased by INR 100/t-200/t. In similar vein, rebar prices in Mandi saw a slight increase of INR 100/t, reaching INR 46,400/t amid steady trade activity.

Overview of other markets

In Chennai, billet prices have risen by INR 200/t to INR 41,500/t, while rebar prices remained steady at INR 46,000/t. HMS 80:20 has dipped by INR 100/t to INR 32,000/t. According to market sources, trade activity in semi-finished and finished steel is low. Despite mills offering lower prices for domestic scrap, obtaining it at competitive rates remains challenging.

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 $365-$370/t, which equates to approximately INR 33,275/t (including freight). Meanwhile, local scrap, HMS (80:20), prices in Mumbai climbed by INR 200/t to INR 32,700/t DAP. In India, indicative prices of shredded scrap from Europe stood at $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 13,200/t.

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