India: BigMint's scrap index witnesses continued growth, rises INR 200/t d-o-d

• Scrap market sees active bookings
  
  
• Imported scrap buying improves
  
  

BigMint's domestic end-cutting scrap index for the Mandi Gobindgarh market climbed by INR 200/tonne (t) to INR 41,300/t DAP on 30 May, 2024.

In the Mandi market today, there was a noticeable increase in trade activity, particularly in scrap and ingot, leading to a rise in prices by INR 200/t-300/t. This uptick in trading was accompanied by favourable transactions and buyers hoping that steel prices will improve after the elections. However, there seems to be a minor disruption in dispatch and arrival processes, possibly due to the upcoming election in Punjab on 1 June and the resumption of strict inspection measures. These factors could be influencing market operations to some extent.

Mill owners in Mandi reported that production levels are currently ranging between 85% to 90%. This is attributed to the prevailing heatwaves in the northern region, which is impacting labour productivity. Specifically, the high temperatures are causing labourers to avoid working during the afternoon hours, resulting in a reduction in overall production.

Raw material prices

Sponge iron (CDRI) prices decreased by INR 200/t to INR 34,600/t in Mandi, while steel-grade pig iron prices in Ludhiana remained stable at INR 42,800/t today.

Steel market

In Mandi, steel ingot prices rose by INR 300/t, reaching INR 46,900/t during reporting and price normalisation. Similarly, prices in various significant markets also witnessed an increase, ranging from INR 100/t to INR 300/t today. The Ahmedabad and Mandi markets have witnessed a significant increase of approximately INR 300/t d-o-d, accompanied by active trading.

The price of rebar (Fe500) has increased by INR 100/t, reaching INR 51,600/t. This rise in price is supported by decent trade activity in the market.

Overview of other markets

Mumbai's IF route rebar (Fe 500) prices remained stable d-o-d at INR 52,600/t exw. The market witnessed limited trading activities in finished steel as buyers are only opting for need-based purchases. Scrap (HMS 80:20) prices stand at INR 36,500/t DAP. The conversion spread from scrap to billet is hovering at INR 10,200/t.

Price highlights

End-cutting and billets spread: In Mandi, the end-cutting scrap and billets spread was at INR 5,600-5,700/t.

Domestic vs imported scrap: Imported melting scrap prices at Nhava Sheva Port were at around $395-$400/t, which equates to approximately INR 35,552/t (including freight), while local scrap-HMS (80:20)-prices in Mumbai remained stable at INR 36,500/t d-o-d. In India, indicative prices of shredded scrap from Europe stood at $415-$417/t CFR Nhava Sheva.

Buyers are maintaining their regular booking patterns in the Indian market as imported scrap prices remain more competitive than domestic prices. This has led to an improvement in buying activity for India, with buyers opting for imported scrap due to its favourable pricing compared to domestic alternatives.

Imported scrap deals

• 1,000 t of shredded scrap was booked at $415/t CFR Nhava Sheva from the USA.
  
  
• 1,000 t of UK-origin shredded was booked at $418/t from the UK CFR Nhava sheva.
  
  
• 500 t shredded scrap was heard to have been booked from Australia at $415/t CFR Chennai
  
  

Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stands at INR 16,150/t.

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