India: SteelMint's scrap index falls by 200/t amid subdued trade in semis

SteelMint's domestic steel scrap (end-cutting) index fell by INR 200/t d-o-d to INR 42,300/t DAP Mandi Gobindgarh on 22 June 2023. The index remained down amid subdued trading activity seen in the semi-finished and finished steel markets. The scrap market was quiet, with traders only dealing in limited volumes.

It emerged that only those mills that had an urgent need for scrap were purchasing it. However, there were no significant transactions. Steel ingot prices in Mandi edged down by INR 200/t to INR 47,300/t at the time of reporting and price normalisation. Meanwhile, prices in other key markets decreased by up to INR 100-300/t. The market witnessed dull buying activity with buyers remaining silent on hopes of further price corrections.

Imported scrap market

At present, the Indian scrap market is soft. Suppliers and buyers are not aggressive in the market. Most suppliers lowered their offers due to the absence of buyers. On the other hand, the domestic market in the UK or the EU remains muted, SteelMint learnt. Imported scrap offers have come down, and we expect further decline towards month end.

Overview of other markets

The price of ship-breaking melting scrap in Alang, Gujarat, edged down by INR 200/t today. This is due to the limited trade in semi-finished and finished steel, as well as moderate buying inquiries for scrap. The current price of HMS (80:20) scrap is INR 38,800/t exy.

The steel market in Raipur was sluggish, with limited trade enquiries for semi-finished and finished steel. This led to big mills cutting production levels, as there was not enough demand to keep them running at full capacity. The shortage of scrap in the market also contributed to the slowdown. Billet prices in raipur stood at INR 43,500/t decreased by INR 150/t d-o-d.

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 $408-$413/t, which equates to approximately INR 36,048/t (including freight). Local scrap (HMS 80:20) prices in Mumbai stood at INR 37,200/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 16,300/t.

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