India: BigMint's scrap index rises by INR 200/t despite moderate demand

The domestic steel scrap index (end-cutting) in Mandi Gobindgarh, as reported by BigMint on 22 Feb, 2024, recorded a rise of INR 200/t, settling at INR 37,600/t on a delivered-at-plant (DAP) basis. In this region, there was a noticeable shortage of scrap, prompting mills to procure scrap at moderate levels. The market has observed spot bookings in the first halves of trading session, which was the primary reason for the increase in semi-finished prices today.

Semis' market

In Mandi, there was an upward movement in steel ingot prices today, with a rise of INR 200/t, reaching INR 43,000/t during the reporting and normalisation process. Similarly, other major markets also experienced an increase in steel ingot prices, ranging from INR 100 to INR 250/t. Today, there was an increase in ingot prices, but market activity remained moderate. Mills experienced relief as there was a sudden surge in spot demand, leading to the price hike.

Raw material price update

In Mandi, the cost of sponge iron (CDRI) held steady at INR 31,000/t today, while pig iron (steel grade) prices in Ludhiana remained unchanged at INR 39,500 per tonne on a delivered-at-plant (DAP) basis.

Imported scrap market

Today in India, the demand for imported scrap was reported as lackluster, primarily due to diminished interest in European-origin scraps owing to significant price differentials compared to domestic scrap. Indicative offers for shredded scraps from Europe were assessed at $418-420/t CFR.

A trader remarked that buyers were deterred by the substantial price disparity, leading to reluctance in booking fresh scraps from the seaborne market.

A mill official remarked, "Sales are sluggish. However, scrap shortages have begun, leading to a slight increase in domestic scrap prices. Fresh offers for CR busheling scraps from Germany were observed at $440/t. Due to uncertainty, we have not made any bookings yet."

Overview of other markets

According to the latest update from BigMint, ship-breaking scrap prices in Gujarat's Alang market saw a decrease of INR 300/t on a day-on-day basis. The assessment puts HMS (80:20) prices at INR 33,700/t ex-yard. The region witnessed a drop of around INR 100-200/t in semi-finished steel prices during yesterday's trading, leading to limited buying interest in scrap and subsequent reductions in supplier 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 $389-$391/t, which equates to approximately INR 34,603/t (including freight), while local scrap-HMS (80:20) prices in Mumbai remained stable at INR 33,000/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 13,100/t.

To see BigMint's melting scrap assessment, pricing methodology and specification documents, Click here

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