India: SteelMint's ferrous scrap index holds steady amid moderate demand for steel
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SteelMint's index for domestic steel scrap (end-cutting) remained stable on 12 January, 2024 at INR 37,600/t DAP Mandi Gobindgarh. In Mandi, a significant number of mills are actively procuring scrap at substantial levels, anticipating an improvement in the steel market in the near term. However, trade activity in the current week for both semi-finished and finished steel has been moderate. Despite the anticipation of positive market developments, the actual trade levels have remained at a moderate pace.
Steel market
Steel ingot prices in Mandi Gobindgarh remained unchanged d-o-d and settled at INR 43,100/t at the time of reporting and price normalisation. Steel prices in the majority of markets increased in the range of INR 100-200/t. The first half of the trading session saw a rise in semi-finished steel prices by INR 100/t due to some spot trades. However, during the second half, market buyers remained silent, causing prices to revert to yesterday's figures once again. The market exhibited volatility throughout the day, influenced by varying levels of trade activity and buyer participation.
"The regional steel market is exhibiting a mixed scenario, with steelmakers facing uncertainty about the future direction. Despite the confusion, there is optimism that the near-term steel market might witness some positive movements in steel prices. Additionally, market activity is expected to remain subdued next week due to the festive period, particularly during Lohri and Makar Sankranti," A mill owner informed SteelMint.
Raw material prices
Sponge iron (CDRI) prices witnessed a rise of INR 100/t, reaching INR 31,800/t. Conversely, pig iron (steel grade) prices in Ludhiana experienced a decline of INR 100/t, settling at INR 40,000/t DAP.
Overview of other markets
Gujarat: On 12 January, 2024, ship-breaking melting scrap prices in Alang, Gujarat, showed no change d-o-d. According to SteelMint's evaluation, HMS (80:20) prices were recorded at INR 34,200/t ex-yard. The demand for semi-finished and finished steel was moderate in the previous trading session, influencing scrap suppliers to maintain stable offers today.
Durgapur: The finished longs (rebar) steel market experienced heightened demand, particularly in the eastern region. This increased demand prompted a surge in offers across various products, leading to a subsequent price rise in the northern region during the first half of the day.
Price highlights
End-cutting-billets spread: In Mandi, the end-cutting scrap and billets spread stood at INR 5,500-6,000/t.
Domestic vs imported scrap: Imported melting scrap prices at Nhava Sheva Port were at around $397-$402/t, which equates to approximately INR 35,577/t (including freight). Meanwhile, in Mumbai, local scrap prices stood at INR 33,000/t, stable d-o-d.
In India, the appetite for imported scrap has stayed low, with primary purchasers favouring domestic procurement due to more economical pricing. Indicative quotes for shredded scrap from Europe were observed in the range of $418-$422/t CFR Nhava Sheva.
Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stood at INR 13,300/t.
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