India: SteelMint's benchmark scrap index continues to decline

SteelMint's domestic steel scrap (end-cutting) index fell by INR 800/tonne (t) to INR 38,000/t DAP Mandi Gobindgarh on 24 November, 2022. Low demand for semi-finished steel and finished products put downward pressure on scrap prices.

Uncertainty surrounding trade and future demand prospects from the domestic market have negatively affected scrap prices.

A trader source said: "We are waiting and watching market trends for stability to return rather than taking hasty decisions which may cause us to lose money".

End-user and retailer sources added that offer prices for finished steel on major markets opened a little higher today, but finally discounts of around INR 1,000-1,500/t were offered.

Today, steel ingots prices in Mandi saw a sharp correction of INR 700/t d-o-d, falling to INR 43,300/t at the time of reporting and price normalisation.

Snapshots of other markets-

Alang - Shipbreaking melting scrap prices declined by INR 1,200/t d-o-d in Gujarat's Alang, as per SteelMint assessment. HMS (80:20) prices are assessed at INR 36,500/t exy. The sharp drop in semi-finished steel prices and lower bids for scrap along with low trade volumes in the spot market exerted pressure on scrap suppliers in the region to reduce offers.

Jalna - Jalna mills also quoted lower prices for scrap today. Bookings took place at INR 34,000-34,500/t today, but prices have already been reduced by about INR 1,000/t for tomorrow .

Chennai- As a result of low steel demand, both scrap and finished steel prices fell by INR 500-700/t.

Market highlights-

End-cutting and billet spread: In Mandi, the end-cutting scrap and billet spread is around at INR 6,000-6500/t.

Domestic and imported scrap price gap: Imported melting scrap prices at Nhava Sheva Port were around $370-378/t (including freight, which comes to approximately INR 33,100/t), while local scrap - HMS (80:20) - prices in Mumbai were assessed at INR 33,000/t.

Raipur sponge iron-billet spread: The current conversion spread (margins) from pellet-based DRI (P-DRI) to steel billets in Raipur stands at around INR 12,000/t.

To see SteelMint's Melting Scrap Assessment, pricing methodology and specification documents, Click here

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