India: SteelMint's scrap index continues to fall amid subdued market sentiment

Domestic steel scrap (end-cutting) index fell by INR 100/t d-o-d to INR 40,100/t DAP Mandi Gobindgarh on 9 October. Local mills are showing interest in procuring domestic scrap in sizeable quantities but the trend of deferred payments is prompting suppliers to tread with caution on new orders.

Sponge iron (PDRI) prices experienced fell by INR 400/t d-o-d to INR 35,600/t, whereas pig iron (SG) prices remained at INR 42,000/t.

Steel ingot prices in Mandi dropped INR 100/t to INR 46,200/t at the time of price normalisation. Meanwhile, other markets saw prices declining by INR 100-300/t. Trading momentum is subdued owing to limited demand for semi-finished and finished steel and liquidity issues. Rebar prices fell by INR 100/t today to INR 50,900/t.

Overview of other markets

Ship-breaking melting scrap prices in Alang, Gujarat, fell by INR 100/t d-o-d. HMS (80:20) prices were assessed at INR 38,900/t exy. Subdued trading in semi-finished and finished steel combined with average buying interest in scrap during the last session created downward pressure on raw material prices. However, Alang HMS (80:20) scrap prices rose by INR 700/t w-o-w.

In the Chennai market, prices of semis and HMS 80:20 remained stable at INR 47,000/t and INR 34,800/t , respectively, while rebar price decreased by INR 500/t to INR 51,000/t. Limited demand for semi-finished and finished steel, despite influx of ferrous scrap into mills, weighed on prices. According to sources, prices may decline in the coming days due to restricted demand for finished steel. But some mill owners are hoping for positive shifts in the steel market in Mandi Gobindgarh.

Price highlights

End-cutting-billets spread: In Mandi, the end-cutting scrap and billets spread stood at INR 5,500-6,100/t.

Domestic vs imported scrap: Imported melting scrap prices at Nhava Sheva Port were at around $395-$400/t, which equates to approximately INR 35,519/t (including freight). Meanwhile, in Mumbai, local scrap prices stood at INR 36,500/t, stable d-o-d.

The imported ferrous scrap market in India was largely inactive today. Offers for shredded scrap from Europe hovered at around $415-$417/t CFR Nhava Sheva, while, HMS (80:20) was assessed at $400/t CFR. Market participants expect a rise in prices, although not immediately.

Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stands at INR 13,400/t.

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