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India: BigMint's scrap index increases by INR 600/t d-o-d on improved steel prices-25 Sept

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Melting Scrap

BigMint Bureau

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25 Sep 2024, 19:11 IST

India: BigMint's scrap index increases by INR 600/t d-o-d on improved steel prices-25 Sept

Raw material prices witness strong upward trend

Semis', finished steel prices rise by INR 600/t d-o-d

BigMint's domestic end-cutting scrap index, tracking the Mandi Gobindgarh market, witnessed a continuous rise, increasing by INR 600/t to INR 37,500/t DAP.

Mills' sentiments

Recent observations indicate that the primary demand is currently driven by dealers and distributors, while end consumers remain relatively inactive. However, the ongoing price increases have created a sense of urgency among buyers, leading to panic buying as stakeholders procure materials in anticipation of further price hikes. In the finished steel segment, prices have risen, but demand has remained moderately quiet, suggesting that near-term activity may stay average. Some stakeholders are choosing to hold back, reflecting a cautious approach given the current market conditions.

Raw materials' overview

Sponge iron (CDRI) prices rose by INR 300/t to INR 31,000/t DAP in Mandi. Meanwhile, pig iron (steel grade) prices in Ludhiana increased by INR 700/t to INR 38,700/t DAP.

Steel market

In the Mandi region, steel ingot prices increased by INR 600/t to INR 42,800/t during the price reporting and normalisation phase. On the other hand, prices in other key markets increased by INR 300/t to INR 1,000/t. The most notable price hike was observed in the Muzaffarnagar steel market, with semi-finished steel prices rising by around INR 1,000/t. The semi-finished steel market in the Mandi region saw a w-o-w increase of INR 1,800/t. Rebar (Fe500) prices in Mandi rose by INR 600/t, reaching INR 47,500/t ex-works, while ERW pipe (patra-based) prices increased by INR 600/t to INR 42,700/t ex-works.

Overview of Mumbai steel market

Prices of rebar (Fe 500) on the Mumbai induction furnace (IF) route increased by INR 200/t to INR 46,200/t exw. Good trade activity was observed in the finished steel market. Additionally, billet prices increased by INR 600/t d-o-d, reaching INR 42,200/t DAP. The current price of scrap (HMS 80:20) stands at INR 33,000/t DAP, with the conversion spread between scrap and billet around INR 9,200/t.

Price highlights

End-cutting-billets spread: In Mandi, the end-cutting scrap and billet spread was at INR 5,300/t.

Domestic vs imported scrap: Imported melting scrap prices at the Nhava Sheva Port were at $370-$372/t, which equates to approximately INR 33,292/t (including freight). Local scrap HMS (80:20) prices in Mumbai increased by INR 200/t to INR 33,000/t DAP. In India, indicative prices of shredded scrap from Europe stood around $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 12,850/t.