India: BigMint's ferrous scrap index shows positive trend w-o-w

The index for domestic steel scrap (end-cutting) in Mandi Gobindgarh declined by INR 100 per tonne (t), reaching INR 37,800/t on a delivered-at-plant (DAP) basis on 24 February, 2024. Scrap prices in the region saw a positive w-o-w trend, increasing by approximately INR 700/t.

Weekly scenario

During the weekly overview in Mandi, there was an improvement in steel scrap arrival, with mills increasingly turning to domestic scarp sources due to limited bookings of imported scrap. Additionally, there has been a notable influx of sponge iron in Mandi, indicating mills' interest in procuring this material.

"With demand for semi-finished and finished steel on the rise, steel mills are maintaining round-the-clock production. Steelmakers anticipate a range-bound trend in the near term, signaling a positive outlook despite recent market challenges. Additionally, the clearing of inventories has provided some respite from the previous sluggish market conditions". A source informed BigMint.

Steel market

In Mandi, steel ingot prices experienced a dip of INR 100/t, reaching INR 42,100/t during the reporting and price normalization. Correspondingly, prices in various notable markets also saw a decline ranging from INR 100/t to INR 300/t today. While the past 10 days showed promising trading activity in the region, today's market is witnessing a slowdown. Additionally, rebar (Fe500) prices in the region dropped by INR 100/t to INR 47,500/t day-on-day.

Raw material price update

In Mandi, the price of sponge iron (CDRI) declined by INR 50/t to INR 31,200/t today, while pig iron (steel grade) prices in Ludhiana held steady at INR 39,500 per tonne on a delivered-at-plant (DAP) basis.

Weekly price change

Prices in several segments witnessed a significant increase: semis (ingot) prices rose by INR 450/t, rebar prices surged by INR 600/t, end cutting scrap prices saw a jump of INR 700/t, and sponge iron (CDRI) prices experienced an improvement of INR 200/t compared to the previous week.

Imported scrap market weekly trend

In India, purchasers remained wary of booking scrap materials sourced from Europe due to a price difference of at least $20/t. However, a few transactions were noted during the week from alternative regions like Latin America, Central America, and Yemen.

Aside from the pricing gap, demand downstream in India stayed subdued as buyers held significant inventories, while distress cargo sales continued in the market, as per industry sources.

On a weekly average basis, shredded scrap offers remained at $416/t CFR Nhava Sheva, unchanged from the previous week. Meanwhile, HMS (80:20) offers increased by $2/t to $391/t CFR, up from $389/t CFR in the previous week.

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 $385-$390/t, which equates to approximately INR 34,535/t (including freight), while local scrap-HMS (80:20) prices in Mumbai up 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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