India: SteelMint's scrap index experiences a m-o-m drop of INR 3,200/t

SteelMint's domestic steel scrap (end-cutting) index decreased by INR 500/t d-o-d to INR 37,600/t DAP Mandi Gobindgarh on 23 October, 2023. Persistent low demand in steel has led to a m-o-m reduction of INR 3,200/t in steel scrap market. Sponge iron (CDRI) prices remain unchanged d-o-d at INR 33,800/t.

The scrap market in Mandi remained silent as no major deals were heard in the region. Mills continued to track imported scrap at discounted prices.

Semi-finished steel market

Steel ingot prices in Mandi were marginally down by INR 500/t to INR 43,400/t at the time of reporting and price normalisation. Meanwhile, prices in other key markets decreased in the range of INR 200-500/t. The market witnessed minimal trade activity in semi-finished and finished steel.

"The steel industry in northern region is grappling with difficulties, as prices have plunged by approximately 3,200/t for semi-finished steel m-o-m, with steel scrap prices experiencing a similar dip. Steel prices are hovering near their lowest levels, and if the market deteriorates further, many mills might reduce production due to surging inventories", mill owner informed SteelMint.

Overview of other markets

On 23 October 2023, Alang, Gujarat's ship-breaking melting scrap prices remained unchanged from the previous day. SteelMint's data reveal HMS (80:20) prices holding at INR 36,500/t exy. With only average buying interest in semi-finished and finished steel during the prior trading session, scrap suppliers decided to maintain their current prices. Notably, a m-o-m drop of INR 1,800/t is observed in HMS (80:20) prices.

The Raipur market witnessed limited trade activity today as no major improvement was seen in semi-finished and finished steel. Billet prices fell by INR 400/t to INR 41,500/t, while rebar (Fe500) prices marginally decreased by INR 700/t to INR 44,800/t.

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 $375-$378/t, which equates to approximately INR 33,625/t (including freight). Meanwhile, in Mumbai, local scrap prices stood at INR 34,700/t, stable d-o-d.

In India today, the demand for imported scrap remained subdued due to the observance of the Ram Navami and Dussehra festivals, as well as a lack of buyer confidence in the current price trend. Shredded scrap from Europe was offered at $395/t CFR at Nhava Sheva. However, buyers were aiming for pricing levels in the range of $385-$390/t CFR.

Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stands at INR 14,000/t.

To see SteelMint's melting scrap assessment, pricing methodology and specification documents, Click here

To provide feedback on this index or if you would like to contribute by becoming a data partner, please contact - info@steelmint.com.