India: BigMint's scrap index rises by INR 100/t ($1.20/t) amid moderate trade

• Scrap market witnesses decent trade activity
  
  
• Buyers restrict themselves from bulk bookings
  
  

BigMint's domestic end-cutting scrap index tracking the Mandi Gobindgarh market rose by INR 100/tonne (t) ($1.20/t) to INR 38,600/t ($462/t) DAP on 3 July, 2024. Mills are continuing to procure domestic steel scrap in the region, while the finished steel market experienced range-bound trade activity today.

A mill owner informed that due to a temporary shortage in CR busheling scrap, suppliers increased their prices by INR 200-300/t today in Mandi and Ludhiana regions.

Raw materials overview

Sponge iron (CDRI) prices in Mandi fell by INR 200/t to INR 31,000/t. Conversely, pig iron (steel grade) prices in Ludhiana remained stable at INR 40,900/t DAP.

Steel market overview

In the Mandi region, steel ingot prices remained stable at INR 44,400/t during the price reporting and normalisation phase. Meanwhile, prices in other key markets decreased by INR 100/t to INR 400/t. The Ghaziabad steel market experienced the most significant drop, with prices declining by INR 400/t d-o-d. Rebar (Fe500) prices held steady at INR 49,200/t ex-works in Mandi, reflecting moderate demand in the market.

Overview of other markets

Mumbai's IF route rebar (Fe 500) prices remained stable d-o-d at INR 48,500/t exw. Due to an unclear market trend, buyers are restricting themselves from bulk bookings. Hence, the market has only seen need-based buying activity in finished steel. However scrap (HMS 80:20) prices stand at INR 34,000/t DAP.

The conversion spread from scrap to billet were hovering at INR 8,700/t.

Price highlights

End-cutting-billets spread: In Mandi, the end-cutting scrap and billets spread was at INR 5,500-5,800/t.

Domestic vs imported scrap: Imported melting scrap prices at Nhava Sheva Port were at around $385-$390/t, which equates to approximately INR 34,751/t (including freight), while local scrap, HMS (80:20), prices in Mumbai remained stable at INR 34,000/t today. In India, indicative prices of shredded scrap from Europe stood at $410-$415/t CFR Nhava Sheva.

As per a market insider, "A short-term shortage has led to a minor rise in domestic steel prices, yet imported scrap purchases are still inactive. Buying activity is expected to pick up after mid-July. The current workable rates for imported scrap into India have reportedly dropped to $410/t for shredded scrap and $386-$388/t for HMS(80:20) CFR West Coast."

Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stood at INR 14,150/t.

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