India: SteelMint's scrap index dips by INR 500/t amid subdued market sentiment
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As of 19 December, 2023, SteelMint's index indicated a decrease in domestic steel scrap (end-cutting) prices by INR 500/t, bringing the new price to INR 38,300/t DAP in Mandi Gobindgarh. The prevailing pressure on scrap suppliers is heightened by a decrease in steel prices. Compounding the situation, mills are acquiring scrap in limited volumes, contributing to the overall challenges faced by suppliers.
Steel market
Steel ingot prices in Mandi Gobindgarh dipped by INR 500/t to INR 43,800/t at the time of reporting and price normalisation. Prices in the majority of key markets decreased in a range of INR 200/t to INR 500/t, today. Rebar(Fe500) prices fell by INR 200/t to INR 48,500/t.
The Mandi Gobindgarh market for semi-finished and finished steel has observed a considerable decline in trading activity over the recent days, leading to pressure on steel manufacturers and a decrease in steel prices across segments. The current market is experiencing disruptions in trade flow as buyers have refrained from participation for the last two days. Additionally, steel producers are facing selling pressure, and there is a noticeable liquidity crunch in the market.
Raw material prices
The prices of sponge iron (CDRI) saw a decrease of INR 100/t, settling at INR 32,500/t. Meanwhile, pig iron (steel grade) prices in Ludhiana fell by INR 100/t to INR 39,500/t d-o-d.
Overview of other markets
Ship-breaking melting scrap prices in Gujarat's Alang market fell by INR 200/t d-o-d today, as per SteelMint's assessment. HMS (80:20) prices were assessed at INR 35,300/t exy. Market participants appeared cautious due to the fluctuating steel prices and the absence of trades in semi-finished steel. Additionally, the difference between bids and offers for scrap led suppliers to reduce their offers.
Today, the Raipur steel market observed a slowdown in trade activity, with prices decreasing across various steel segments. The demand for steel has been sluggish in the market for the past few days. Billet prices fell by INR 200/t to INR 40,450/t, while rebar(Fe500) prices decreased by INR 300/t to INR 43,500/t exw.
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 $392-$396/t, which equates to approximately INR 35,138/t (including freight). Meanwhile, in Mumbai, local scrap prices stood at INR 34,000/t, stable d-o-d.
Today in the Indian market, a lack of buying interest resulted in the absence of firm offers or bids. This can be attributed to the price disparity and the availability of more cost-effective alternatives domestically. Indicative offers from Europe were observed in the range of $415-$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 13,300/t.
To see SteelMint's melting scrap assessment, pricing methodology and specification documents, Click here
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