India: BigMint's scrap index rises by INR 300/t despite moderate demand

The domestic steel scrap index (end-cutting) in Mandi Gobindgarh, as reported by BigMint on 27 January, 2024, recorded a rise of INR 300/t, settling at INR 37,500/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 last 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 42,800/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 200/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 materials price update

In Mandi, the cost of sponge iron (CDRI) increased by INR 200/t, reaching INR 31,400/t, reflecting a surge in sponge iron usage in the area. Concurrently, pig iron (steel grade) prices in Ludhiana witnessed a marginal decline of INR 50/t, settling at INR 39,500/t on a DAP basis.

Weekly price change

There was a marginal downtrend observed in steel ingot prices, decreasing by INR 100/t. In contrast, end-cutting scrap prices experienced a slight increase of INR 100/t due to scrap shortage. Additionally, sponge iron (CDRI) prices reflected a decrease of INR 100/t, mirroring the same figure for rebar (Fe500) in Mandi Gobindgarh.

Overview of other markets

In the Alang market of Gujarat, ship-breaking melting scrap prices saw a marginal reduction of INR 100/t d-o-d on 27 January, 2024. As per BigMint's assessment, HMS (80:20) prices were quoted at INR 33,700/t ex-yard. Sluggish trading activities observed in both semi-finished and finished steel in the recent days have impacted the demand for scrap, leading to a decline in the offered prices.

Imported scrap market weekly

This week in India, potential buyers opted to stay on the sidelines due to a significant gap between bid and offer prices. Additionally, domestic scrap prices proved to be more economically attractive compared to imported scraps, resulting in subdued demand for imported scrap.

An official from a steel mill stated, "There is a significant gap between domestic and imported prices, making imports financially unviable, with a minimum gap of $20/t. Therefore, we will refrain from booking imported scrap until it becomes economically feasible, opting to purchase domestic scrap as needed."

The weekly average offers for shredded scrap from Europe experienced a decline of $6/t, reaching $415/t CFR Nhava Sheva, compared to the previous week's $421/t.

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 $392-$395/t, which equates to approximately INR 35,033/t(including freight),while local scrap-HMS (80:20)-prices in Mumbai stood at INR 33,000/t stable 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 13,150/t.

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