India: BigMint's ferrous scrap index rises slightly, market sentiments unchanged
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BigMint's domestic steel scrap index (end-cutting), which tracks the Mandi Gobindgarh market, recorded a rise of INR 100/t, settling at INR 37,700/t on a delivered-at-plant (DAP) basis on 28 February, 2024.
Steel market
The cost of steel ingots in Mandi increased by INR 100/t to INR 43,000/t during the reporting and normalization phase. Similarly, other markets also witnessed a surge in steel ingot prices, ranging from INR 100-300/t. However, market activity remained moderate in both trading sessions.
Prices of rebar (Fe500) remained unchanged at INR 47,500/t ex-works, with moderate activity observed in the region.
In north India, prices have increased slightly, while for the east, west, and south domestic prices remain at their lowest. Import bookings have commenced in India, yet there remains a price difference of INR 1-1.5/kg, making domestic material more economical. Import bookings are primarily due to volume concerns rather than price feasibility. However, Pakistan and Bangladesh continue to offer more lucrative markets compared to India," a mill owner informed BigMint.
Raw material prices
Today's update from Mandi indicates an uptick in sponge iron (CDRI) prices by INR 200/t, now standing at INR 31,200/t, while pig iron (steel grade) rates in Ludhiana stayed at INR 39,300/t delivered-at-plant (DAP).
Imported scrap market
Today, the imported ferrous scrap market in India exhibited moderate activity, with a slight increase in enquiries and a few deals being finalised. Nonetheless, there persists a noticeable price differential between domestic and imported scrap offers. Buyers are participating in the market, albeit at a slower pace and based on immediate requirements. According to market sources, shredded scrap from Europe/UK is being offered at levels of around $420-425/t CFR, while HMS (80:20) is priced at $395/t CFR. However, buyers' bids are reportedly below these levels.
Overview of other markets
Mumbai's IF route rebar (Fe 500) prices remained stable at INR 48,700/t exw d-o-d. Limited trading activities in the spot market were seen. Owing to support from previous bookings, sellers are not facing too much selling pressure. Scrap (HMS 80:20) prices are at INR 33,500/t DAP. Conversion spread from scrap to billet is hovering at INR 9,200/t.
Gujarat: Rebar (Fe 500) prices in Ahmedabad remained unchanged, maintaining stability at INR 48,300/t FOR. There has been moderate trading activity in the spot market. Scrap (HMS 80:20) is priced at INR 32,900/t DAP. The conversion spread from scrap to billet is approximately INR 10,700/t.
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: Imported melting scrap prices at Nhava Sheva Port were at around $377-$394/t, which equates to approximately INR 34,523/t (including freight), while local scrap-HMS (80:20) prices in Mumbai fell by INR 100/t to INR 33,500/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 13,250/t.
To see BigMint's melting scrap assessment, pricing methodology and specification documents, Click here
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