India: SteelMint's scrap index drops INR 400/t d-o-d on lacklustre steel demand

SteelMint's domestic steel scrap (end-cutting) index fell by INR 400/tonne (t) d-o-d to INR 37,900/t DAP Mandi Gobindgarh on 21 December,2023.

The index fell on subdued trading activity in the semi-finished and finished steel markets, with semis' prices dipping around INR 800/t w-o-w. Today, there was a limited pace in scrap procurement from major mills, with only essential base buying activity observed in the market.

Steel market

Steel ingot prices in Mandi edged down by INR 350/t to INR 43,400/t at the time of reporting and price normalisation. Meanwhile, prices in other key markets decreased by up to INR 200-400/t. The market witnessed dull buying activity with buyers remaining silent hoping for further price correction. However, there were no significant transactions seen today.

Raw material prices

Sponge iron (CDRI) prices dipped by INR 200/t to INR 32,300/t. Meanwhile, pig iron (steel grade) prices in Ludhiana remained stable at INR 39,600/t d-o-d.

Overview of other markets

The ship-breaking melting scrap prices in Alang, Gujarat, experienced consistent on 21 December, 2023, with no significant changes. SteelMint's analysis indicates that HMS (80:20) is currently priced at INR 35,000/t ex-yard, despite a reduction in semi-finished steel prices in the recent trading session, suppliers opted to keep their offers stable today due to moderate buying interest for scrap in the region.

In today's trading session, the Jalna market experienced limited demand for semi-finished and finished steel. Rebar and scrap prices declined by INR 300/t to INR 48,200/t and INR 33,500/t, respectively, while billet prices dropped by INR 200/t to INR 42,800/t. Mill owners continued to decrease scrap prices to sustain the conversion cost. However, due to lower offers, scrap supply has also been interrupted.

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 $390-$392/t, which equates to approximately INR 34,833/t (including freight). Meanwhile, in Mumbai, local scrap prices stood at INR 33,700/t, down by INR 300/t d-o-d.

In India, the mismatch between sellers' asking prices and buyers' bids persisted, resulting in a lack of new deal closures lately. Furthermore, as Christmas approaches, only a limited number of sellers are active. The last reported offers for shredded scrap from Europe were $410-$415/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 12,950/t.

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