India: SteelMint's scrap index drops INR 200/t d-o-d on muted steel demand
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SteelMint's domestic steel scrap (end-cutting) index fell by INR 200/tonne (t) d-o-d to INR 37,400/t DAP Mandi Gobindgarh on 17 January, 2024. In Mandi, the arrival of domestic scrap was at an average level. However, due to the elevated prices of imported scrap, there was a shift towards using sponge at a charge mix ratio of 80:20. This suggested that, in the near term, there will be an increase in the utilisation of sponge as a substitute.
Steel market
Steel ingot prices in Mandi Gobindgarh dipped by INR 100/t to INR 42,800/t at the time of reporting and price normalisation. Prices in the majority of key markets decreased in a range of INR 100/t to INR 300/t. Over the past four to five days, the market in Mandi has been quiet, characterised by minimal trade activity in both semi-finished and finished steel. Mills were experiencing pressure, leading to a decline in prices today. The subdued market conditions and challenges faced by mills have contributed to this downturn in pricing. Rebar (Fe500) prices fell by INR 200/t to INR 47,300/t d-o-d.
Raw material price update
In Mandi, the prices for sponge iron (CDRI) experienced a decline of INR 100/t, settling at INR 31,500/t. At the same time, pig iron (steel grade) prices saw a decrease of INR 200/t, reaching INR 39,800/t DAP.
Overview of other markets
On 17 January, 2024, ship-breaking melting scrap prices in Gujarat's Alang market witnessed a decrease of INR 200/t d-o-d, according to SteelMint's assessment. HMS (80:20) prices were evaluated at INR 34,000/t ex-yard. The demand for semi-finished and finished steel was low in the previous trading session. This, combined with limited trading activity in scrap, prompted suppliers to reduce their offers today.
Mumbai's IF route rebar (Fe 500) prices remained stable and stood at INR 48,600/t exw d-o-d. Dull trading activities have been observed in the spot market. Buyers opted for wait-and-watch mode to procure material in bulk. Conversion spread from scrap to billet was hovering around INR 9,400/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 vs imported scrap: Imported melting scrap prices at Nhava Sheva Port were at $395-$400/t, which equates to approximately INR 35,458/t (including freight). Meanwhile, in Mumbai, local scrap prices stood at INR 33,000/t, stable d-o-d.
Today, the demand for imported scrap in India remained low due to a lack of buying interest. European shredded scrap was offered at $415-420/t CFR Nhava Sheva. Buyers showed a preference for high sea sales, with shredded offers at $405/t CFR, but bids fell below these levels. Some favoured East African and Australian materials for quick shipments, but concerns about high container freight rates were present. Offers for containerised HMS scraps from Australia were at $412-$416/t CFR Chennai and Vizag, with moderate interest from buyers.
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.
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