India: SteelMint's ferrous scrap index shows stable trend d-o-d
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On 13 January, 2024, SteelMint's index for domestic steel scrap (end-cutting) showed no change, maintaining stability at INR 37,600/tonne (t) DAP Mandi Gobindgarh.
Over the past two days, there has been a slow pace in scrap arrivals, with mills procuring scrap at essential levels. Meanwhile, steelmakers are optimistic about potential improvements in the coming week. The current situation reflected a cautious approach in scrap procurement, and industry participants are anticipating positive developments in the steel market in the near future.
Scrap movement
The overall movement of scrap in the market has been decent in the week, but there has been a slight decline in activity in recent days. Mills are prioritising the continuous procurement of domestic scrap, as imported scrap is currently considered impractical. This shift in focus reflected the current market dynamics and the preference for domestically sourced scrap materials.
Steel market
The prices of steel ingots in Mandi Gobindgarh showed no change d-o-d, holding steady at INR 43,100/t during the time of reporting and price normalisation. At the same time, steel prices experienced a decrease ranging from INR 100 to INR 200 per ton in most markets, while some markets reported unchanged figures. This indicates a varied and dynamic pricing trend across different regions.
Due to the Lohri and Makar Sankranti festivals, the majority of today's market is expected to be closed. Despite a moderate trend observed throughout the week, there has been no significant trade improvement in the semi-finished and finished steel sector. The festivities contribute to a subdued market environment, with limited trading activities in the steel sector during this period.
Overview of other markets
As of 13 January, 2024, ship-breaking melting scrap prices in Alang, Gujarat, remained steady d-o-d. According to SteelMint's assessment, HMS (80:20) prices were reported at INR 34,200/t ex-yard. The prices of semi-finished steel showed stability in the region in the trading session of the previous day. Scrap suppliers, responding to moderate buying inquiries at the current price levels, decided to keep their offers firm today.
Imported scrap market weekly trend
Throughout the week, demand for imported scrap in India remained consistently limited, as only buyers with urgent needs participated in procurement. Steel mills, uncertain about price trends and considering cost-effective materials available in the domestic market, adopted a cautious stance and refrained from active participation.
Nevertheless, import offers from Europe experienced an increase due to limited collection and a firm seller stance. The weekly average for shredded scrap offers from Europe was assessed at $420/t CFR Nhava Sheva, marking an increase of $8/t compared to the previous week's $412/t CFR.
Approximately 1,100-1,200 t of HMS (80:20) scraps were secured from Yemen and Bahrain at prices ranging from $375/t to $400/t CFR. There were no reported bookings for shredded scrap during the week.
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.
Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stood at INR 13,350/t.
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