India: SteelMint's scrap index falls INR 300/t despite improved demand for semis

SteelMint's domestic steel scrap (end-cutting) index fell by INR 300/t d-o-d to INR 43,100/t DAP Mandi Gobindgarh on 18 May, 2023. In Mandi, some improvement in the scrap and semis markets was seen as mills and traders concluded fresh bookings in the second half of today's session.

Steel ingot prices in Mandi edged down by INR 200/t d-o-d to INR 48,100/t at the time of reporting and price normalisation. Prices in other key markets decreased by INR 200-300/t. Today, the Mandi market witnessed improved demand for semis, while the finished steel market is constrained by limited trade inquiries.

Market scenario

Demand for semis has kept the scrap market supported and trade activity remained decent, with mills approaching local traders for domestic scrap.

Imported scrap

Import offers are unchanged and prices are expected to fall. Exports from the Middle East exports are totally off while inquiries for scrap of EU and US origin were heard in the market.

Shredded scrap of EU-origin stood at $440/t while the same grade from the US was assessed at $435/t.

Overview of other markets

Ship-breaking melting scrap prices in Gujarat's Alang edged down by INR 200/t d-o-d on 18 May. As per SteelMint's assessment, HMS (80:20) prices are at INR 39,500/t exy.Limited trade in semi-finished and finished steel in yesterday's trading session coupled with moderate buying inquiries has put pressure on prices.

The Chennai market witnessed modest trade inquiries for semis and finished steel. But the market was silent today. Billet prices in Chennai stood at INR 46,800/t, fell by INR 200/t, while rebar prices were assessed at INR 52,200/t exw.

Price highlights

End-cutting-billets spread: In Mandi, spread between end-cutting scrap and billets stood at INR 5,000-5,500/t.

Domestic/imported scrap price gap: Imported melting scrap prices at Nhava Sheva Port were at around $421-$425/t, which equates to approximately INR 37,320/t (including freight). Local scrap (HMS 80:20) prices in Mumbai stood at INR 38,500/t DAP.

Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stands at INR 15,250/t.

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