India: SteelMint's scrap index rebounds on improving steel demand

SteelMint's domestic steel scrap (end-cutting) index edged up by INR 200/t d-o-d to INR 39,500/t DAP Mandi Gobindgarh on 31 July 2023. In Mandi, the last few days have been quite supportive for scrap traders and ingot-billet producers as demand has improved in the region.

Steel ingot prices in Mandi inched up by INR 100/t to INR 44,500/t at the time of reporting and price normalisation. Meanwhile, prices in the other key markets increased by up to INR 200-300/t d-o-d.

"In Mandi, small semis producers are under pressure to run full hours as trade flow has been disturbed for the past few weeks and the conversion of old scrap to ingot is not profitable," a source informed. Currently, the old scrap (LMS) to ingot conversion is 10,500/t.

CR Busheling scrap prices increased in the Mandi and Ludhiana regions, as per SteelMint's assessment. Prices moved up by 300-500/t from the base prices. In Mandi, CR Busheling scrap prices stood at INR 40,900/t, while in Ludhiana, prices were assessed at INR 40,500/t.

Imported scrap market

The Indian imported scrap market witnessed dull sales. Offers are high, and there is no major booking at these levels, as buyers are bidding at the $403-$408/t levels for shredded and $375-$380/t for HMS grade.

Most participants are not in the mood to pay high prices for imports.

In a recent development, a small quantity has been booked the UK/Europe at $412/t, while offers are at $410-415/t. Offers for PNS are at $420/t CFR Nhava Sheva.

Overview of other markets

Alang: Ship-breaking melting scrap prices in Alang, Gujarat, inched up by INR 200/t d-o-d on 31 July. As per SteelMint's assessment, HMS (80:20) prices opened at INR 36,800/t exy. Despite limited trade in semis and finished steel, scrap suppliers were receiving moderate buying enquiries, encouraging them to increase prices further.

Chennai: In today's Chennai market, prices of semis remained stable at INR 43,000/t, while those of rebars and HMS 80:20 remained stable at INR 47,500/t and INR 31,700/t, respectively. The market observed sluggish trade movement in finished steel, with mill owners offering rebars for projects at approximately INR 47,500-48,500/t, and for retail sales, offers were at INR 47,500-49,000/t exw.

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 $382-$388/t, which equates to approximately INR 34,127/t (including freight). Local scrap (HMS 80:20) prices in Mumbai stood at INR 34,300/t increased by INR 700/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 13,750/t.

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

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