India: SteelMint's ferrous scrap index continues to edge down

SteelMint's domestic steel scrap (end-cutting) index decreased by INR 100/t d-o-d to INR 41,700/t DAP Mandi Gobindgarh on 27 June, 2023.

There were limited trade inquiries in the scrap market. Due to low steel demand, major mills curtailed their scrap purchases while, on the other hand, mills are using sponge iron for steel-making as prices of sponge iron are cheaper than old scrap. As per SteelMint's assessment, prices for sponge iron (CDRI) are assessed at INR 33,000/t DAP.

Steel ingot prices in Mandi inched up by INR 50/t to INR 46,800/t at the time of reporting and price normalisation. Meanwhile, prices in other key markets decreased by up to INR 100-300/t. The market witnessed dull buying activity, with buyers remaining silent on hopes of further price correction.

Imported scrap market

India's imported scrap market saw negotiations continuing at workable price levels. Mills are procuring small parcels due to uncertainty prevailing in the market. Buyers are looking for prices below $420/t CFR.

Overview of other markets

Prices of ship-breaking melting scrap in Alang, Gujarat fell by INR 200/t to INR 38,600/t exy on 27 June. This was due to the decline in semi-finished steel prices by INR 500/t in the previous trading session. Moderate trading activities in the scrap market also contributed to the decline in prices.

Demand for semi-finished and finished steel in Raipur is weak. Major mills are offering discounts to local traders due to selling pressure. Current market conditions are not favourable for steel producers. Shortage of scrap persists in the market. Billet prices in raipur fell by INR 150/t d-o-d to INR 43,250/t, while rebar prices assessed at INR 46,600/t down by INR 200/t d-o-d.

Price highlights

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

Domestic/imported scrap price gap: Imported melting scrap prices at Nhava Sheva Port were at around $400-$405/t, which equates to approximately INR 35,400/t (including freight). Local scrap (HMS 80:20) prices in Mumbai stood at INR 36,500/t DAP.

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

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