India: BigMint's ferrous scrap index remains stable d-o-d amid moderate trade inquiries

BigMint's domestic steel scrap (end-cutting) index remained stable at INR 37,500/t DAP Mandi Gobindgarh on 29 January, 2024. In today's market, scrap trading showed a moderate pace as mills secured scrap at decent levels. The heightened demand for sponge iron in Mandi can be attributed to the scarcity of scrap and the impracticality of relying on imported scrap, which remained unavailable.

Semis' market

Steel ingot prices in Mandi showed no change d-o-d, holding steady at INR 42,800/t during the reporting and price normalisation period. In contrast, prices in various other significant markets experienced a decline ranging from INR 50/t to INR 200/t. The market witnessed moderate activity today, with both trading sessions showing decent performance.

Steel manufacturers were grappling with a challenging period in recent weeks as demand for finished steel remained sluggish in the region. Despite several major mills operating around the clock, smaller mills were constrained to a 12-hour work schedule. However, it is worth noting that finished steel mills maintain a healthy inventory amid subdued demand.

"The steel market is currently stagnant, attributed to the anticipation surrounding upcoming elections and the release of the new budget. Majority of buyers are adopting a wait-and-watch policy during this period," a mill owner told BigMint.

Raw materials price update

In Mandi, the price of sponge iron (CDRI) dropped by INR 100/t, settling at INR 31,300/t. Meanwhile, pig iron (steel grade) prices in Ludhiana remained stable d-o-d, staying at INR 39,500/t on a DAP basis.

Overview of other markets

In Gujarat's Alang market, ship-breaking melting scrap prices saw a modest rise of INR 300/t d-o-d on 29 January, 2024. According to BigMint's evaluation, HMS (80:20) prices were determined at INR 34,000/t ex-yard. The region experienced an increase of INR 100-200/t in semi-finished steel prices during the recent trading session. This, along with moderate buying interest for scrap, prompted suppliers to raise their offers, as per sources.

The Raipur steel market saw limited working today as billet prices decreased by INR 100/t to INR 39700/t, while rebar(Fe500) prices were down by INR 100/t to INR 42,800/t d-o-d.

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 market: Imported melting scrap prices at Nhava Sheva Port were at around $386-$390/t, which equates to approximately INR 34,629/t(including freight),while local scrap-HMS (80:20)-prices in Mumbai stood at INR 33,000/t stable d-o-d.

Demand for imported scrap in India has remained subdued, primarily due to the impracticality stemming from the disparity between domestic and imported scrap prices. Indicative offers for shredded scrap from Europe were assessed at $405-410/t CFR Nhava Sheva.

According to a scrap trader, "There is currently a lack of enthusiasm from buyers to acquire any materials in India. The predominant activity is confined to distress selling."

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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