India: SteelMint's scrap index continues to fall amid lacklustre steel demand

SteelMint's domestic steel scrap (end-cutting) index fell by INR 500/tonne (t) d-o-d to INR 39,800/t DAP Mandi Gobindgarh on 19 July, 2023. The index remained down on subdued trading activity in the semi-finished and finished steel markets. The scrap market was also quiet, with traders only dealing in limited volumes. This is likely due to weak demand for steel products. Scrap shortages predominated in the market.

Semis' market trend

Steel ingot prices in Mandi edged down by INR 400/t to INR 44,900/t at the time of reporting and price normalisation. Meanwhile, prices in other key markets decreased by up to INR 300-400/t. The market witnessed dull buying activity with buyers remaining silent on hopes of further price corrections. However, there were no significant transactions seen today.

In Mandi, steel ingot prices opened on a positive note at INR 45,200/t. But, in the second half of the trading session, selling pressure continued in the market and prices fell by INR 400/t to INR 44,900/t.

Imported scrap market

India: Imported scrap buyers are active with negotiation seen between buyers and suppliers. People are showing more interest in HMS-grade rather than any other higher-grade material. Meanwhile, imported scrap prices remain supportive, yet buyers are looking for further corrections. Fresh offers are hovering at $405-$406/t CFR levels. However, the buyers' target is $400/t levels.

Overview of other markets

Alang: Ship-breaking melting scrap prices in Alang, Gujarat, remained steady d-o-d on 19 July. As per SteelMint's assessment, HMS (80:20) prices stood at INR 36,500/t exy. Despite the slight hike in semi-finished steel prices, suppliers decided to roll over scrap offers owing to limited demand.

Raipur: The Raipur market continues to remain soft as no major improvement was noticed in semi-finished and finished steel. Billet prices in Raipur dipped by INR 350/t to INR 40,750/t, while rebar prices fell by INR 400/t to INR 43,100/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 $380-$390/t, which equates to approximately INR 34,222/t (including freight). Local scrap (HMS 80:20) prices in Mumbai stood at INR 34,800/t, increasing by INR 300/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 14,700/t.

To see SteelMint's melting scrap assessment, pricing methodology and specification documents, Click here

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