India: SteelMint's ferrous scrap index drops INR 100/t on weak demand

SteelMint's domestic steel scrap (end-cutting) index fell by INR 100/tonne (t) to INR 38,800/t DAP Mandi Gobindgarh on 26 July, 2023. The Mandi market witnessed minimal trade activity today, as the major mills did not evince any interest in scrap purchase.

Steel semis market

Steel ingot prices in Mandi rose by INR 100/t d-o-d to INR 43,900/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. Selling pressure is still intense on ingot producers, as only low volumes were heard traded today.

"Yesterday's trading session was quite supportive for ingot manufacturers, with moderate trading activity seen at INR 43,800/t." a source informed.

Imported scrap market

Indian steelmakers are keeping a close watch on the market anticipating further price correction. However, some small parcels were heard booked for Mundra. Bearish finished steel demand weighs on scrap bookings.
On the other hand, moderate spot transactions were witnessed in the sponge iron market, which led to a decline in both offers and bids, thereby intensifying the pressure on suppliers.

Overview of other markets

Alang: In Gujarat's Alang market, ship-breaking melting scrap prices remained stable d-o-d on 26 Jul'23. As per SteelMint's assessment, HMS (80:20) prices stood at INR 36,100/t exy. Even as buying inquiries for semi-finished and finished steel were limited in yesterday's trading session, scrap offers remained supported on moderate demand and limited supply of material.

Mumbai: Rebar prices in Mumbai fell by INR 300/t d-o-d and trade reference prices of 12mm, FE 500 rebar stands at INR 45,800-46,200/t. Limited sales in the spot market were seen. Scrap (HMS 80:20) hovered at INR 33,500-33,700/t Dap Mumbai. However, lower scrap volumes are arriving at current rates. The conversion spread from scrap to billet stands at INR 8,500/t, as per sources.

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 $380-$390/t, which equates to approximately INR 34,197/t (including freight). Local scrap (HMS 80:20) prices in Mumbai stood at INR 33,600/t, down INR 100/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 stands at INR 14,150/t.

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