India: BigMint's scrap index rises amid moderate trade activities
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An increase in prices for domestic end-cutting scrap at Mandi Gobindgarh steel market was noticed on Monday. Prices surged by INR 200/t, reaching INR 37,800/t on delivery at the plant. Today, steel manufacturers in Mandi were actively acquiring domestic scrap at favourable levels. Meanwhile, market activity in the region's semi-finished and finished steel segments remained moderate.
Steel ingot prices in Mandi saw an uptick today, climbing by INR 200/t to reach INR 43,100/t during reporting and normalisation phase. Similarly, other prominent markets also observed an increase in steel ingot prices, ranging from INR 100 to INR 300/t. While there was a rise in ingot prices, market activity remained moderate.
Market trend
The current state of the Mandi steel market showed a slight uptick compared to the previous trading session. Steelmakers noted that Mandi operated within a range-bound market, with fluctuations of around INR 200/t in price levels. The near-term outlook also appeared moderate, with ingot prices fluctuating around +/-100/t to 200/t.
Raw material price update
The cost of sponge iron (CDRI) in Mandi rose by INR 100/t to INR 31,000/t. Currently, steel makers in Mandi are utilising sponge iron at a charge mix level of approximately 20%, with the remaining 80% being steel scrap or adjusted as per requirements. Pig iron (steel grade) prices in Ludhiana fell by INR 100/t, settled at INR 39,200/t on a delivered-at-plant (DAP) basis.
Imported scrap market
Today, the imported ferrous scrap market in India continued to experience dullness as buyers remained cautious amid a persistent decline in offers. However, there is a sense among buyers that if imported scrap prices align with those of domestic scrap, booking activities will pick up. Transactions in the market mainly involve arrivals or scrap originating from non-European sources.
Indicative offers for shredded scrap from the UK/Europe were reported at $405-410/t CFR, while those from the US stood at around $400/t CFR.
Overview of other markets
Mumbai's IF route rebar (Fe 500) prices remained stable and stood at INR 48,900/t exw d-o-d. Limited trading activities have been observed in finished segment in the spot market. Scrap (HMS 80:20) prices hovered in the range of INR 33,500-33,800/t DAP. Conversion spread from scrap to billet hovering around INR 9,300/t.
On 4 March, 2024, ship-breaking melting scrap prices in Alang, Gujarat, remained unchanged compared to the previous day. HMS (80:20) prices stood at INR 33,600/t ex-yard, as assessed by BigMint. There were moderate buying inquiries for semi-finished and finished steel in the last trading session, leading scrap suppliers to maintain stable offers today.
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 $375-$386/t, which equates to approximately INR 34,202/t (including freight), while local scrap-HMS (80:20) prices in Mumbai rose by INR 100/t to INR 33,600/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 13,300/t.
To see BigMint's melting scrap assessment, pricing methodology and specification documents, Click here
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