India: SteelMint's ferrous scrap index drops INR 400/t on limited steel demand
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SteelMint's domestic steel scrap (end-cutting) index fell by INR 400/t d-o-d to INR 42,000/t DAP Mandi Gobindgarh on 6 Sept, 2023. In Mandi, demand for semi-finished and completed steel has remained limited, while scrap is plentiful in the region. Domestic scrap is being purchased in lower-than-average volumes by mills.
"Workflow in the Mandi market is hampered by average trade and continuous GST inspection," a source informed SteelMint.
Raw material prices
Sponge iron (CDRI) prices fell by INR 200/t to INR 36,100/t DAP, while pig iron prices were assessed at INR 43,000/t unchanged d-o-d.
Semi-finished steel market
Today, steel ingot prices in Mandi Gobindgarh dipped by INR 300/t to INR 47300/t at the time of reporting and price normalisation. Prices in almost all key markets decreased in the range of INR 100/t. In Mandi, the first half of the trading session was quiet, with steel ingot prices opening at 47,600/t, but in the second half of the trading session, selling pressure increased, and the market fell INR 300/t, with ingot prices remaining at 47,300/t. Buyers became active in fallen prices all of a sudden.
Imported scrap market
At present, Turkey is holding the prices. No further upside has been seen. By EOW, we can see some upside.
Possibilities are there for an upward market. But the way prices have gone up in the past week shows that mills must have already stocked up their inventory.
Few shredded bookings were heard at the 435 level from the UK, US works were done at $430-$432, and optional bookings were heard as buyers seemed observational, waiting for clear vision with Turkish resumption.
Overview of other markets
Ship-breaking melting scrap prices in Alang, Gujarat, remained stable d-o-d on 6 Sep'23. As per SteelMint's assessment, HMS (80:20) prices stood at INR 38,500/t exy. Stable semi-finished steel prices in Gujarat and moderate buying inquiries for scrap in the region prompted suppliers to keep offers firm.
Mumbai's IF route rebar (Fe 500) prices remained stable at INR 52,200/t exw d-o-d. Slow market movement has been spotted at the current offers in the market owing to the festive mood. Scrap (HMS 80:20) prices stand at INR 36,800/t DAP. Conversion spread from scrap to billet, hovering at around INR 10,000/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 were at around $415-$420/t, which equates to approximately INR 37,135/t (including freight). Meanwhile, in Mumbai, local scrap prices stood at INR 36,800/t, up by 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 13,950/t.
To see SteelMint's melting scrap assessment, pricing methodology and specification documents, Click here
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