India: SteelMint scrap index continues to fall amid sluggish sentiments

SteelMint's domestic steel scrap (end-cutting) index fell further by INR 400/tonne (t) to INR 42,600/t DAP Mandi Gobindgarh on 20 May, 2023. Prices continued to decline amid limited buying enquiries.Today, the semi-finished and finished steel markets in the region witnessed limited trade.

Steel ingot prices in Mandi dipped by 300/t d-o-d to INR 47,700/t at the time of reporting and price normalisation as buyers were silent amid dull market sentiments. Prices in almost all key markets decreased by up to INR 200-300/t.

The Mandi scrap market, this week, remained active as traders sold decent volumes in the past 3-4 days. The availability of scrap in the market remains low.

Imported scrap market

Indian imported ferrous scrap market slowed down with less deals happening across the country due to the sluggish finished steel market and sales. Few participants were cautious about booking after customs stopped clearances for UAE material.

Shredded scrap offer of EU-origin stood at $440/t while the same grade from the US was assessed at $435/t.

Overview of other markets

Ship-breaking melting scrap prices in Gujarat's Alang market inched down by INR 200/t d-o-d on 20 May'23. HMS (80:20) prices were assessed at INR 38,900/t exy. The market witnessed subdued demand for semis and finished steel in yesterday's trading session. Also, limited trading for scrap resulted in a further drop in offers.

Jalna: The finished market remained favourable last week. The average daily production material got sold out but obtaining raw materials was challenging.

Jalna mills typically use scrap and sponge in a 70:30 % ratio as their raw materials, but lately, due to a shortage of scrap,increased price and a need to save costs, they have been forced to use more sponge (in a 60:40 ratio).

Price highlights

End-cutting-billets spread: In Mandi, the spread between end-cutting scrap and billets stood at INR 5,000-5,500/t.

Domestic/imported scrap price gap: Imported melting scrap prices at Nhava Sheva Port were at around $421-$425/t, which equates to approximately INR 37,434/t (including freight). Local scrap (HMS 80:20) prices in Mumbai stood at INR 38,000/t DAP.

Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stands at INR 14,950/t.

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