India: SteelMint's scrap index dips by INR 600/t amid subdued market sentiment

Domestic steel scrap (end-cutting) index fell by INR 600/t d-o-d to INR 37,100/t DAP Mandi Gobindgarh on 26 December, 2023. Local mills are showing interest in procuring domestic scrap in sizeable quantities but the downtrend prices in semi-finished steel are prompting suppliers to tread with caution on new orders.

Steel ingot prices in Mandi Gobindgarh declined by INR 600/t, to INR 42,600/t at the time of price normalisation. Similarly, other significant markets witnessed price drops ranging from INR 400/t to INR 700/t. Trading momentum is subdued owing to limited demand for semi-finished and finished steel and liquidity issues.

Overview of other markets

Alang: Ship-breaking melting scrap prices in Gujarat's Alang market decreased by INR 200/t d-o-d on 26 Dec'23, as per SteelMint's assessment. HMS (80:20) prices were assessed at INR 34,900/t exy. Lack of trades in semi-finished and finished steel materials in yesterday's trading session coupled with limited buying inquiries for scrap, forced suppliers to reduce their offers, today.

Raipur: 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 500/t to INR 39,450/t, while rebar (Fe500) prices decreased by INR 300/t to INR 43,100/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 $386-$390/t, which equates to approximately INR 34,600/t (including freight). Meanwhile, in Mumbai, local scrap prices stood at INR 33,500/t, stable d-o-d.

In India, no definite offers for imported scrap were observed, with suppliers on Christmas break, and purchasing activity remained slow with previously booked materials available at lower prices in the domestic market.

The local market is experiencing a subdued and downward trend, with expectations of a potential revival after Mid-January. Offers and indications hover at $405-415/t for shredded from EU/US . Suppliers are scarce in the market, and a clearer picture is expected after the New Year as many yard owners and traders are currently on holiday.

Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stood at INR 12,850/t.

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