India: SteelMint's scrap index declines by INR 100/t d-o-d amid a muted market
...
SteelMint's domestic steel scrap (end-cutting) index recorded a decline of INR 100/t to INR 38,600/t DAP Mandi Gobindgarh on 15 December, 2023. The prices of steel scrap marked a drop of INR 100-200/t on the day. In the region, the scrap market experienced moderate trading, with a persistent shortage of scrap resources posing challenges in the primary market. Trading activity in both the semi-finished and finished markets was limited today.
Factors for slower trend today
Strict income tax raids: The imposition of strict income tax raids on major mills can create an atmosphere of uncertainty in mandi. Trade activity may become more cautious in their operations, fearing legal repercussions and disruptions caused by these raids.
Scrap suppliers holding scrap due to ongoing raids and expectation of improved steel prices: The decision of scrap suppliers to hold onto their inventory due to slow demand suggests a mismatch between supply and demand in the market. This can lead to short-term challenges for mills. In recent days, there has been a decrease in the activity of scrap trucks. Additionally, scrap suppliers are optimistic about a potential upturn in steel ingot prices, which could result in an increase in scrap prices.
Semis' market
In Mandi Gobindgarh, the prices of steel ingots witnessed a reduction of INR 100/t, reaching INR 44,100/t during the reporting and normalisation period. Notably, major markets experienced a broad decline, with prices showing a range between INR 100-200/t. The present situation in the Mandi Gobindgarh steel market is defined by a sluggish trading pace, as buyers remained subdued and unresponsive during both trading sessions.
Overview of other markets
Durgapur: Overall, the semi finished market witnessed a stable trend with prices falling in the northern region. Trades were moderate throughout the week as buyers remained cautious for bulk booking. The finish steel demand is still on the lower side which drives market prices in a volatile condition.
Ship-breaking melting scrap prices in Gujarat's Alang market fell by INR 300/t to INR 35,700/t d-o-d today. Today, Alang ship-breaking melting scrap prices reached a two-year low. The market saw limited buying inquiries, and according to market sources, "The significant arrival of imported scrap in large quantities at Kandla port, previously booked at lower prices, coupled with liquidity issues, are the major factors contributing to the decrease in prices."
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 $396-$400/t, which equates to approximately INR 35,413/t (including freight). Meanwhile, in Mumbai, local scrap prices stood at INR 34,000/t, stable d-o-d.
Recently, in India, no new bookings have been reported, as steel mills maintain ample inventory, resulting in a diminished appetite for imports. Additionally, buyers are inclined towards purchasing materials that have already arrived at lower rates. Indicative offers for shredded scrap from Europe were evaluated at $420/t CFR Nhava Sheva.
Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stood at INR 13,050/t.
To see SteelMint's melting scrap assessment, pricing methodology and specification documents, Click here
To provide feedback on this index or if you would like to contribute by becoming a data partner, please contact - info@steelmint.com.
