India: SteelMint's scrap index range-bound amid weak steel demand

SteelMint's domestic steel scrap (end-cutting) index edged up marginally by INR 100/tonne (t) to INR 42,700/t DAP Mandi Gobindgarh on 22 May, 2023. The Mandi market witnessed limited demand for semis and finished steel today.

Today, steel ingot prices in Mandi increased slightly by INR 100/t d-o-d to INR 47,800/t at the time of reporting and price normalisation; however, overall demand for semi-finished steel remained weak. Prices in almost all key markets decreased in the range of INR 200/t.

Market trends

In the fourth week of May, scrap traders continued to witness average trading activity as market trends fluctuated. Today, the availability of scrap was relatively better but major mills did not show interest in bulk bookings.

Compared to the last trading session, the Mandi market saw demand for finished steel softening today.

Imported scrap market

India's import ferrous scrap market continued to remain slow with few enquiries surfacing at current offers. Buyers are not keen on bookings amid prevailing gloomy sentiments.

The containerised scrap market is expected to witness some deals, although for nominal volumes, in the coming days from Europe and the US.

Shredded scrap offers 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 declined by INR 300/t d-o-d in Gujarat's Alang on 22 May. As per SteelMint's assessment, HMS (80:20) prices stood at INR 38,600/t exy. Limited trading and declining semi-finished steel prices exerted pressure on scrap prices, sources informed.

In south India finished steel demand was limited and some mills expressed readiness to sell rebar at INR 51,000/t on advance payment basis. Rebar prices in Chennai stood at INR 52,000/t, a decrease of INR 300/t d-o-d.

Price highlights

End-cutting-billets spread: In Mandi, the 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 37,410/t (including freight). Local scrap (HMS 80:20) prices in Mumbai stood at INR 37,500/t, down 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 15,400/t.

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