India: SteelMint's ferrous scrap index stable amid soft steel demand

SteelMint's domestic steel scrap (end-cutting) index remained stable d-o-d at INR 41,000/t DAP Mandi Gobindgarh on 22 August, 2023. Weak trading activity was seen in the Mandi market today but mills as well as scrap traders are expecting an improvement in prices. Meanwhile, availability of steel scrap was good in the market today.

Steel ingot prices in Mandi Gobindgarh remained unchanged d-o-d at INR 46,000/t at the time of reporting and price normalisation. Prices in almost all key markets increased in the range of INR 100-300/t. Today's trading session in Mandi Gobindgarh was quiet due to limited demand for semi-finished and finished steel.

Imported scrap market

Currently scrap offers are expected to stay at $440-445/t for Pakistan (deals done at $437-440/t levels). In India offers are at $430-435/t and have been concluded at at $432/t recently.

Sellers are currently uncertain about pitching offers at a certain level due to uncertainty in booking patterns from Turkish and other buyers.

"We are expecting prices to stay range-bound due to a few deals heard recently and some negotiations are on for September shipments," a source informed.

Bulk consignments are coming to Indian ports at comparatively low prices and LC opening issues in Pakistan have constrained bookings, which are likely to dry up this week.

The outlook is mixed and prices might go up by $5-10/t.

Overview of other markets

Gujarat: Ship-breaking melting scrap prices inched down further by INR 200/t d-o-d in Gujarat's Alang market on 22 August. SteelMint assessed opening prices of HMS (80:20) at INR 36,800/t ex-yard. The slight drop in scrap prices was due to subdued demand and a fall in semi-finished steel prices in yesterday's trading session.

Durgapur: The eastern region witnessed prices seesawing in both semis and the finished longs segment. Shortage of PDRI kept the semi-finished market stable. Spot trades were moderate as average buying was seen throughout the week. Transactions in most regions remained stable, with minimal changes in prices.

Billet prices in Durgapur assessed at INR 43,200/t increased by INR 150/t, while PDRI sponge iron prices stood at INR 29,050/t up by 100/t d-o-d.

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 $402-$410/t, which equates to approximately INR 36,196/t (including freight). Meanwhile, in Mumbai, local scrap prices stood at INR 35,600/t fell up to INR 400/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 13,350/t.

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