India: SteelMint's scrap index continues to rise as steel prices inch up

SteelMint's domestic steel scrap (end-cutting) index rose by INR 200/t d-o-d to INR 41,600/t DAP Mandi Gobindgarh on 9 May, 2023. The market saw some improvement in demand for semi-finished steel today.

In Mandi, steel ingot prices inched up by INR 200/t to INR 46,800/t at the time of reporting and price normalisation. Prices in almost all key markets increased by INR 200-400/t. Demand for semi-finished steel remained firm today.

In morning trade today in Mandi demand for semis was satisfactory when ingot prices were at INR 46,700/t. In the second half of the trading session, ingot prices increased by INR 100/t to INR 46,800/t.

Scrap availability was relatively low today as scrap traders looked for a stronger rebound in steel prices, while buying interest was increased in the second half.

Trade inquiries for scrap have increased since last week, and major mills are looking for domestic scrap, a trader source informed SteelMint.

Imported scrap market

The import scrap market remained range-bound today and the market is expected to edge up in the coming days on better finished steel sales.

Shredded scrap of Europe-origin stood at $429/t while the same grade of US-origin was assessed at $422/t.

Overview of other markets

Ship-breaking melting scrap prices in Gujarat's Alang market continued the uptrend, rising further by INR 600/t d-o-d on 9 May. As per SteelMint's assessment, HMS (80:20) prices opened at INR 38,100/t exy. Rising semi-finished steel prices in the western region in the last trading session coupled with active scrap buying from Bhavnagar-based induction furnace mills pushed up prices.

Jalna: Since scrap is the main raw material for the IF mills in Jalna, steelmakers were forced to raise their bids in order to access enough scrap to keep operations running smoothly. However, selling pressure for rebar continues to exist.

In Chennai, demand for finished steel is still very limited, and inventories are increasing. Semis and finished steel prices remained stable today, while HMS scrap prices decreased by INR 200/t to INR 35,500/t.

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 $412-$418/t, which equates to approximately INR 36,512/t (including freight). Local scrap (HMS 80:20) prices in Mumbai stood at INR 37,000/t up by INR 500/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 stood at INR 16,000/t.

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

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