India: SteelMint's ferrous scrap index drops INR 300/t on soft steel demand

SteelMint's domestic steel scrap (end-cutting) index decreased by INR 300/t d-o-d to INR 40,700/t DAP Mandi Gobindgarh on 10 August, 2023. In Mandi, demand for semi-finished and finished steel remains restricted and, compared to yesterday, today the market witnessed minimal trade activity.

"Due to the drop in steel ingot prices today mills are acquiring scrap at reasonable price levels since availability is decent," a scrap trader source told SteelMint.

Steel ingot prices in Mandi inched down by INR 200/t d-o-d to INR 45,700/t at the time of reporting and price normalisation. Meanwhile, prices in other key markets dropped up to INR 300/t.

"Buyers of semi-finished steel remained silent today as no major deals were seen in the market," a mill owner source informed SteelMint.

Imported scrap market

However, for Indian buyers the origin of the material is secondary; steel producers are looking for more quality material at feasible prices. "HMS of European origin is rusty, whereas HMS from Africa is clean and better in terms of recovery, a scrap trader said.
Scrap buyers are looking for material from origins other than UK or EU due to low recovery rate. Despite high prices Indian buyers are going for material with better recovery rates," said another scrap buyer.

Overview of other markets

Gujarat: Shipbreaking melting scrap prices in Gujarat's Alang market decreased by INR 500/t d-o-d on 10 August, as per SteelMint's assessment. HMS (80:20) prices were assessed at INR 36,700/t exy. Lack of trades in semi-finished and finished steel in yesterday's trading session coupled with limited buying inquiries for scrap, forced suppliers to reduce their offers today.

In today's Chennai market, prices of semis, rebar, and HMS 80:20 remained stable and are assessed at INR 44,500/t, INR 48,500/t and INR 32,800/t, respectively. Demand for semi-finished and finished steel is limited, while scrap supply has improved due to good prices offered by the mill owners.

HMS 80:20 (scrap) to billet (semi-finished) spread stands at INR 11,700/t (down INR 100/t)

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 are at around $390-$398/t, which equates to approximately INR 35,094/t (including freight). Meanwhile, in Mumbai local scrap prices stood at INR 35,000/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 13,250/t.

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