India: SteelMint's scrap index inches up by INR 100/t d-o-d

The domestic steel scrap (end-cutting) index by SteelMint marked an increase of INR 100/t from the previous day, positioning at INR 39,300/t DAP in Mandi Gobindgarh on 16 October 2023. Mills extending their credit terms have made scrap traders wary of taking on new substantial bookings. Consequently, Mandi Gobindgarh is experiencing a disrupted trade flow, given the steel market's tepid demand.

The conversion spread from scrap to ingot fell by INR 300/t settling at INR 11,000/t.

Steel Market

Steel ingot prices in Mandi fell by INR 200/t to INR 45,000/t at the time of reporting and price normalisation. Meanwhile, prices in other key markets dipped by INR 200/t. The semi-finished and finished steel markets are currently experiencing subdued trade activity, with prices plunging by almost 1,200/t compared to last week. Liquidity challenges in the primary market are further compounding the woes of mills and traders. Additionally, the weather was not favourable today.

Overview of other markets

In Gujarat's Alang market, ship-breaking melting scrap prices showed a daily increase of INR 300/t on 16 October 2023, with SteelMint's assessment placing HMS (80:20) prices at INR 38,100/t exy. Prices of semi-finished and finished steel experienced an upturn during the previous trading session in the region, motivating scrap suppliers to revise their price offers today.

The semi-finished and finished steel sectors in Durgapur saw minimal movement, as buyers were largely inactive across both trading sessions. Billet prices decreased by INR 350/t to INR 41,800/t, while rebar prices remained stable at INR 45,200/t exw.

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 $392-$395/t, which equates to approximately INR 35,091/t (including freight). Meanwhile, in Mumbai, local scrap prices stood at INR 35,500/t, constant d-o-d.

Today, there was noticeable sluggishness in the demand for imported scrap in India, primarily due to disparities between the bid and offer prices. While offers for shredded scrap from Europe remained in the range of $405-$410/t CFR Nhava Sheva, buyers' bids were falling below these price levels. HMS (80:20) scrap from Europe were heard at $395/t CFR Nhava Sheva.

Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stands at INR 13,800/t.

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