India: SteelMint's scrap index inches down by INR 100/t amid weaker steel demand

SteelMint's domestic steel scrap (end-cutting) index decreased marginally by INR 100/tonne (t) d-o-d to INR 39,500/t DAP Mandi Gobindgarh on 21 July, 2023.

The market saw fewer trade activities in semis and finished steel with limited inquiries. Scrap traders are dealing with a very low profit margin as mills are not procuring the raw material in large volumes due to soft steel trade.

Semis market trends

In Mandi, steel ingot prices edged down by INR 100/t to INR 44,600/t at the time of reporting and price normalisation. Prices in almost all the key markets remained stable d-o-d.

A weaker steel market trend continues to drag down ingot offers. Prices came down by around INR 3600/t since 16 June. Selling pressure continues in the Mandi market.

Imported scrap market

Indian imported scrap buyers remained active in the market, with some active transactions recorded throughout the week. Interestingly, prices remained range-bound for the day. Yet deals remain absent as buyers await clear market direction.

On the other hand, trading activities for sponge iron, a substitute for scrap, have increased due to improved demand at lower prices, especially in the eastern and central regions.

Overview of other markets

• Alang: Ship-breaking melting scrap prices in Alang, Gujarat, remained steady for the third consecutive day on 21 Jul'23. As per SteelMint's assessment, HMS (80:20) prices stood at INR 36,500/t exy. Trade activities for semi-finished steel in the region are still limited. However, moderate demand for scrap prompted suppliers to keep their offers stable.
  
  
• Mumbai: Finished steel manufacturers lower their prices by INR 500-700/t in TMT and structure. Following this, buyers also lowered their bids for scrap significantly. However, the material is rarely available at the quoted bids, so there is still demand for high-priced material, however, buying is slow.
  
  

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 $380-$390/t, which equates to approximately INR 34,163/t (including freight). Local scrap (HMS 80:20) prices in Mumbai stood at INR 34,300/t decreased by INR 500/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 14,350/t.
  
  

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

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