India: BigMint's scrap index unchanged despite price disparities

BigMint's domestic scrap (end-cutting) index remained steady at INR 37,700/t DAP Mandi Gobindgarh on 7 March, 2024. The scrap procurement activity was affected by a disparity between buyers and sellers, resulting in only a few mills in need purchasing scrap at suppliers price.

Semis' market

The latest update from Mandi indicates an increase in steel ingot prices, with a jump of INR 100/t, settling at INR 43,100/t during reporting and normalisation process. Additionally, similar trends were observed in various major markets, where steel ingot prices saw an uptick ranging from INR 100 to INR 300/t. The steel market in Mandi continued with a moderate trend, supported by ample availability of steel scrap in the region and decent demand in the steel segment.

"Because of the good availability of steel scrap in the region, Mandi steel mills intended to negotiate lower prices with local scrap suppliers today. However, scrap suppliers were reluctant to agree to the reduced prices, resulting in a slow market for scrap procurement from the mills." a mill owner told BigMint.

Raw material price update

In Mandi, the price of sponge iron (CDRI) decreased by INR 100/t to INR 30,900/t, while in Ludhiana, pig iron (steel grade) prices remained unchanged, holding steady at INR 39,100/t on a delivered-at-plant (DAP) basis.

Imported scrap market

The imported ferrous scrap market in India remained quiet today, with no strong inquiries reported. Shredded scrap indicative offers from major exporting nations ranged between $400-$410/t CFR.

A representative from a trading company noted, "We haven't received any solid inquiries for imported material today. Additionally, the declining Turkish market has also affected sentiment."

Another trader commented, "Indian buyers are not offering competitive prices compared to other South Asian buyers like Bangladesh and Pakistan."

Overview of other markets

According to the latest report from BigMint, the ship-breaking melting scrap prices in Alang, Gujarat, held firm on 7 March, 2024. The assessed prices for HMS (80:20) stood at INR 33,700/t ex-yard. There was an average level of demand observed for semi-finished and finished steel in the region during yesterday's trading session. Given this scenario and with moderate trade activity in the scrap sector, suppliers opted to retain their offers at unchanged levels today.

Today, the Raipur steel market experienced increased demand with notable trade activity in both semi-finished and finished steel segments. Moreover, recent auctions for raw materials garnered a positive response from buyers, further supporting market sentiment. Billet prices were up by INR 100/t to INR 40,000/t, while rebar(Fe500) prices stood at INR 44,000/t, unchanged 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: The imported melting scrap prices at Nhava Sheva Port stood at approximately $375/t-$380/t, equivalent to around INR 33,633/t (including freight charges). Meanwhile, local scrap prices for HMS (80:20) in Mumbai saw a decrease of INR 100/t, reaching INR 33,700/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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