India: Steelmint's scrap index drops on sluggish trends in semi-finished steel market
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SteelMint's domestic steel scrap (end-cutting) index fell by INR 100/t d-o-d to INR 42,900/t DAP Mandi Gobindgarh on 15 June, 2023. The scrap market saw moderate trade inquiries, while scrap traders are hoping for some improvement in current prices of scrap.
Semis market trend
Today, steel ingot prices in Mandi fell slightly by INR 100/t to INR 47,900/t at the time of reporting and price normalisation. Prices in almost all key markets decreased by INR 100-200/t. In Mandi, selling pressure continues as there is limited demand for semis due to the drop in prices of ingot.
Imported scrap market
No changes in scrap import offers have been seen, yet trade activity is low and prices may remain volatile for one more week as major market players are waiting for more clarity, Offers for EU shredded are ranging from $430 to $435/t, varying with region of loading and freight cost.
Use of sponge iron
The big mills in Punjab rarely use sponge iron. But sometimes, as per requirement or due to price viability, mills use sponge in a mix of 85% scrap and 15% sponge.
Sponge iron is being used at times of scrap shortage or when scrap traders quote high prices which forces the small mills to use sponge, but this practice is temporary.
Overview of other markets
Raipur: The market saw average trade in semi-finished and finished steel while shortage of scrap continues. Billet prices in Raipur stood at INR 44,000/t, down by INR 100/t, while rebar prices were assessed at INR 47,500/t fell up to INR 200/t d-o-d.
Chennai: Today, prices of semis, finished steel and HMS 80:20 remained stable at INR 45,500/t, INR 50,000/t and INR 34,400/t, respectively.
The market observed limited demand for finished steel. Mill owners are opting to use a blend of 30% sponge iron in their charge mix. The current market offer for sponge iron is approximately INR 27,500/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/imported scrap price gap: Imported melting scrap prices at Nhava Sheva Port were at around $415-$418/t, which equates to approximately INR 36,530/t (including freight). Local scrap (HMS 80:20) prices in Mumbai stood at INR 37,000/t DAP.
Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stood at INR 15,950/t.
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