India: SteelMint's scrap index continues to rise on moderate buying activity

On 11 December, SteelMint reported an INR 100/t d-o-d rise in the domestic steel scrap (end-cutting) index, bringing it to INR 38,200/t DAP Mandi Gobindgarh. Moderate demand characterised the Mandi steel market across both trading sessions. Notably, mills continue to procure domestic scrap in significant volumes, despite the prevailing shortage of scrap in major markets.

Semis' market

Steel ingot prices in Mandi increased by INR 100/t to INR 43,700 t at the time of reporting and price normalisation. Meanwhile, prices in other key markets increased by INR 100/t-200/t.

"Today's market exhibited decent trade activity, driven by the optimism of major mills anticipating positive price trends in the near term. It is expected that steel ingot prices will soon reach INR 44,000/t". Mill owner informed SteelMint.

Raw material prices

In the Mandi region, prices for sponge iron (CDRI) have increased by INR 300/t, reaching INR 32,500/t. Conversely, steel-grade pig iron prices in Ludhiana have remained unchanged at INR 39,400/t d-o-d.

Overview of other markets

Ship-breaking melting scrap prices in Gujarat's Alang market fell by INR 300/t d-o-d on 11 Dec'23, as per SteelMint's assessment. HMS (80:20) prices were assessed at INR 36,500/t exy. Trade participants seemed cautious amidst mixed sentiments in the market and lack of trades in semi-finished steel. That apart, disparity in bids and offers prompted suppliers to lower offers.

Price highlights

End-cutting-billets spread: In Mandi, the end-cutting scrap and billets spread stood at INR 5,500-6,000/t.

Domestic vs imported scrap: Imported melting scrap prices at Nhava Sheva Port were at around $400-$405/t, which equates to approximately INR 35,964/t (including freight). Meanwhile, in Mumbai, local scrap prices stood at INR 34,300/t, stable d-o-d.

In India, there was a noticeable lack of enthusiasm in fresh bookings for imported scrap, primarily attributed to the price disparity and the availability of cost-effective options in the domestic market. Indicative prices for shredded scrap from Europe were reported at $425/t CFR, while from the United States offers were at $420/t CFR.

A trader remarked, "Although there's an increase in offers, actual buyers are scarce. Inquiries are being received, but they are not aligning with the current pricing levels. Furthermore, higher offers are prompting buyers to explore other alternatives, such as procuring scrap or sponge iron domestically."

Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stood at INR 13,250/t.

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