India: SteelMint's ferrous scrap index up marginally d-o-d following uptick in semis prices

SteelMint's domestic scrap index remained more or less stable d-o-d as the market saw price fluctuations up to the level of INR 300/t today. Meanwhile, end-user demand for steel continued to remain limited. The domestic steel scrap (end-cutting) index increased by INR 100/tonne (t) to INR 43,800/t DAP Mandi Gobindgarh on 19 January, 2023.

The index rose as semi-finished steel demand and prices improved in today's trading session.

Prices of steel ingots in Mandi Gobindgarh opened on a negative note in morning trade today, decreasing by INR 300/t to INR 49,200/t, but edged up later in the day to INR 49,500/t at the time of reporting and price normalisation. Except Mandi and Ludhiana, prices in almost all the key markets either remained stable or decreased by up to INR 500/t today.

Imported scrap trading activity has increased m-o-m as secondary and small mills prefer competitively-priced domestic scrap. However, if local supplies tighten, they would be forced to import to replenish their inventories.

"During the first half today, the market remained negative, but in the second half, buyers turned active and moderate volumes of semi-finished steel were traded," a source said.

Snapshots of other markets-

Alang: Ship-breaking melting scrap prices fell sharply by INR 800/t d-o-d in Gujarat's Alang market on 19 Jan'23. HMS (80:20) prices opened at INR 38,700/t exy. Lower bids and limited trade volumes along with a sharp drop in semi-finished steel prices in yesterday's session forced scrap suppliers to cut their offers, as per sources.

Hyderabad: Today, semis prices in the south India's Hyderabad market moved down by INR 500/t to INR 49,500/t, while rebar prices decreased to INR 53,500/t. HMS 80:20 prices also edged down by INR 200/t to INR 36,500/t DAP.

Price highlights-

End-cutting and billets spread: In Mandi, the end-cutting scrap and billets spread was at around INR 5,000-5,500/t.

Domestic and imported scrap price gap: Imported melting scrap prices at Nhava Sheva Port were at around $435-440/t (including freight, which equates to approximately INR 38,100/t), while local scrap - HMS (80:20) - prices in Mumbai were assessed at INR 37,300/t.

Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stands at around INR 15,450/t.

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