India: SteelMint's scrap index drops INR 400/t d-o-d

SteelMint's domestic steel scrap (end-cutting) index dropped INR 400/t d-o-d to INR 41,700/t DAP Mandi Gobindgarh on 1 July, 2023. The Mandi market saw limited demand for semis and finished steel amid reduced consumption of scrap due to both easy availability and cheaper prices of sponge iron.

Semis market trends

In Mandi today, steel ingot prices fell by INR 300/t to INR 46,700/t at the time of reporting and price normalisation. Prices in almost all the key markets decreased by INR 200-300/t while trade activity declined d-o-d. In key markets, selling pressure continued to mount on ingot producers resulting in a drop in prices.

Weekly imported scrap market

Indian scrap buyers continued to book small parcels of imported scrap to replenish inventory in anticipation of improved production activities post monsoon. Meanwhile, Indian buyers took advantage of the ongoing Eid holidays as Islamic countries were out of the market and may return next week. Buyers have placed bids at low levels as they are in a position to avail of substitute material (sponge iron) in the domestic market at a reasonable price. Some steel producers are opting to wait and watch for clear market direction.

Offers hover at $415-420/t CFR, although no fresh deal has been heard concluded. Additionally, the domestic market remained unsupportive for semi-finished and finished steel.

Overview of other markets

Ship-breaking melting scrap prices inched down by INR 200/t d-o-d in Gujarat's Alang market on 1 July, SteelMint's assessment shows. HMS (80:20) prices stand at INR 38,100/t ex-yard. Semi-finished steel prices remained stable in yesterday's trading session. Moreover, subdued trading activity in the region prompted scrap suppliers to cut their offers today.

Chennai: Due to lacklustre demand for finished and semi-finished steel, major mills reduced their output. In Chennai, billet prices stood at INR INR 44,200/t, while rebar prices were assessed at INR 49,000/t exw.

Price highlights

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

Domestic/imported scrap price gap: Imported melting scrap prices at Nhava Sheva Port were at around $398-$400/t, which equate to approximately INR 35,038/t (including freight). Local scrap (HMS 80:20) prices in Mumbai stood at INR 36,000/t.

Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stands at INR 15,950/t.

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