India: BigMint's ferrous scrap index rises INR 300/t d-o-d, bid offer disparity prevails

• Scrap prices rise amid shortage
  
  
• Prices of semis edge up in Mandi
  
  

BigMint's domestic end-cutting scrap index tracking the Mandi Gobindgarh market climbed by INR 300/t to INR 38,300/t DAP on 29 July, 2024. Local mills are opting for domestic scrap as imported scrap is currently not viable. The consumption of sponge iron has also increased in the Mandi market.

"Today, the market witnessed a price improvement amid ongoing bid-offer disparities between scrap buyers and sellers. The persistent scrap shortage continues to pose challenges for mills. Local rerolling units are sourcing billets from Durgapur due to more favourable pricing. The near-term market appears to be range-bound, with ingot prices fluctuating between INR 42,700/t and INR 43,500/t," a mill owner informed BigMint.

Raw materials overview

Sponge iron (CDRI) prices in Mandi increased by INR 100/t to INR 30,300/t. Pig iron (steel grade) prices in Ludhiana remained unchanged at INR 40,200/t DAP.

Steel market

In the Mandi region, steel ingot prices rose by INR 200/t to INR 43,200/t today during the price reporting and normalisation phase. Meanwhile, prices in other key markets rose by INR 50/t to INR 300/t. In the Jaipur market, semi-finished steel prices increased by INR 300/t d-o-d.

Rebar (Fe500) prices rose slightly by INR 100/t to INR 47,600/t exw amid limited trade activities in Mandi.

Overview of other markets

In the western India-based Jalna market, semi-finished steel prices rose by INR 100/t to INR 41,200/t, while finished steel prices remained steady at INR 44,800/t. HMS 80:20 prices saw an improvement of INR 200/t to INR 32,800/t.

Market sources report that the demand for finished steel is moderate. Last Friday, mills managed to book a significant quantity of rebar as prices dropped by INR 2,000/t, but trade activities decreased again the following day. Domestic scrap arrivals are decent at current price levels, but if mills reduce their offers, they may struggle to secure materials.

Price highlights

End-cutting-billets spread: In Mandi, the end-cutting scrap and billets spread was assessed at INR 4,900-5,200/t.

Domestic vs imported scrap: Imported melting scrap prices at Nhava Sheva Port were at around $387-$395/t, which equates to approximately INR 35,273/t (including freight), while local scrap, HMS (80:20), prices in Mumbai fell by INR 200/t to INR 32,800/t today. In India, indicative prices of shredded scrap from Europe stood at $410-$418/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 13,750/t.

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