India: SteelMint's scrap index falls by INR 400/t amid subdued trade in semis

SteelMint's domestic steel scrap (end-cutting) index fell by INR 400/t d-o-d to INR 41,300/t DAP Mandi Gobindgarh on 3 July, 2023. The index remained down today due to subdued trading activity in the semi-finished and finished steel markets. The scrap market was also quiet, with traders only dealing in limited volumes. This is likely due to weak demand for steel products.

Semis' market trend

Steel ingot prices in Mandi edged down by INR 300/t to INR 46,400/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. However, there were no significant transactions seen today.

In Mandi, steel ingot prices opened on a positive note at INR 46,600/t. But, after the second half of the trading session, selling pressure continued in the market and prices fell by INR 200/t to INR 46,400/t.

Imported scrap market

Imported scrap prices remained unchanged from last week's closing. Prices of shredded remained the same at $415-420/t.HMS 80:20 prices also remained flat at $400/t.

It was heard that a few bulk bookings were made by some major steel mills. More bulk bookings can happen if prices stay on the lower side for some more time.

Overview of other markets

Gujarat: Ship-breaking melting scrap prices in Alang saw a slight decrease of INR 300/t on July 3, 2023. The current price of HMS(80:20) is INR 37,800/t exy. The decline in prices is attributed to the drop in semi-finished steel prices and subdued trading activities in the scrap market.

In the Chennai market today, prices of semis fell by INR 200/t to INR 44,000/t, while finished steel prices remained stable at INR 49,000/t. On the other hand, HMS 80:20 prices declined by INR 500/t to INR 33,400/t. During today's trading session, the market observed limited trading activities in steel, while mill owners continue to increase sponge consumption in the charge mix. Due to this, domestic scrap prices have been consistently decreasing.

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 $398-$400/t, which equate to approximately INR 34,977/t (including freight). Local scrap (HMS 80:20) prices in Mumbai stood at INR 35,200/t, falling by up to INR 800/t d-o-d.

Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stands at INR 15,550/t.

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