India: SteelMint's scrap index falls as steel demand slows down
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SteelMint's domestic steel scrap (end-cutting) index decreased by INR 300/tonne (t) on d-o-d basis, to INR 38,600/t DAP Mandi Gobindgarh on 1 November, 2023. In the region, the situation has remained relatively consistent in recent days, with declining demand and price reductions observed across various steel segments. Scrap prices have declined by INR 500/t, and there has been a drop of INR 200/t in rebar (Fe500) prices from the past couple of days while availability of scrap is lower due to the ongoing slow market and GST checks.
Sponge iron (CDRI) prices have decreased by INR 300/t, standing at INR 34,000/t d-o-d.
Steel market
Steel ingot prices in Mandi Gobindgarh declined by INR 250/t, settling at INR 44,300/t. Similarly, other significant markets witnessed price drops ranging from INR 300/t to INR 600/t. In Mandi, the trading conditions for semi-finished and finished steel were limited today, with a significant number of buyers adopting a cautious "wait and see" approach before making decisions.
Overview of other markets
On 1 November, 2023, SteelMint's assessment indicated a INR 500/t drop in ship-breaking melting scrap prices in Gujarat's Alang market. The HMS (80:20) was evaluated at INR 36,700/t ex-yard. A reduction of around INR 400-500/t was observed in semi-finished steel prices during the previous trading session. Consequently, the limited interest from buyers in acquiring scrap prompted suppliers to revise their offers downward.
Mumbai's IF route rebar (Fe 500) prices experienced a slight decrease of INR 100/t on d-o-d basis, settling at INR 49,800/t ex-works. Conversely, structure (40x40 angle) prices exhibited a more substantial decline of INR 1,000/t on d-o-d basis, reaching INR 51,200/t ex-works. The market has been characterized by subdued trading activities in finished steel over the past few days due to prevailing weak sentiments. Meanwhile, the price for scrap (HMS 80:20) remained at INR 34,000/t delivered at the destination. The conversion spread from scrap to billet continues to hover around INR 9,500/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 $378-$385/t, which equates to approximately INR 34,263/t (including freight). Meanwhile, in Mumbai, local scrap prices stood at INR 34,000/t, unchanged on d-o-d basis.
The demand for imported scrap in India was slower than expected. Some mills were not inclined to procure material due to sufficient inventories on hand, while others faced disparities between bid and offer prices. Shredded scrap was being offered at $405/t CFR Nhava Sheva, while buyers' bids fell around $400/t CFR levels. A few deals have concluded at $400-$402/t levels, along with inquiries for new tinplates (NTP) heard at around $420-$425/t CFR Chennai, whereas HMS (80:20) offers were heard at $385-$390/t across major regions like Mumbai and Chennai.
Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stands at INR 13,850/t.
To see SteelMint's melting scrap assessment, pricing methodology and specification documents, Click here
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