India: SteelMint's scrap index remains stable amid moderate steel trade
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On 16 November, 2023, SteelMint's domestic steel scrap (end-cutting) index stayed unchanged d-o-d at INR 38,300/t DAP Mandi Gobindgarh. The scrap market is witnessing moderate trade, with mills procuring domestic scrap.
Steel market
Steel ingot prices in Mandi Gobindgarh rose by INR 100/t to INR 44,100/t at the time of reporting and price normalization. Prices in the majority of key markets increased ranging from INR 100/t to INR 200/t. Trade activity in the semi-finished and finished steel markets in Mandi Gobindgarh was moderate, and prices for semi-finished and finished steel ticked up slightly. Rebar prices stood at INR 48,500/t, up by INR 200/t d-o-d.
"Small steel mills are struggling to procure scrap at affordable prices, which is leading to higher conversion costs for steel production. This is putting a strain on their margins and making it difficult for them to compete with larger mills. Large steel mills, on the other hand, are able to procure scrap in larger volumes, which is helping to keep their costs under control," a mill source informed SteelMint.
Raw material prices
Prices of sponge iron (CDRI) stayed stable d-o-d at INR 33,300/t. In Ludhiana, pig iron (steel grade) prices were recorded at INR 39,900/t, unchanged d-o-d.
Overview of other markets
Durgapur: In general, the semi-finished market saw a marginal increase in offers, with notable price hikes observed in the eastern region. Trades remained moderate throughout the week due to the ongoing festive season, and buyers exercised caution in concluding bulk bookings. Billet prices in the region increased by INR 200/t to INR 41,200/t, while rebar prices stood at INR 44,300/t stable d-o-d.
On 16 November, ship-breaking melting scrap prices in Gujarat's Alang market declined by INR 300/t, according to SteelMint's assessment. HMS (80:20) prices were evaluated at INR 36,500/t ex-yard. Limited buying inquiries for scrap compelled suppliers to lower their offers on this day. The market had been closed for approximately two consecutive days following the Diwali festival.
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 $387-$395/t, which equates to approximately INR 35,081/t (including freight). Meanwhile, in Mumbai, local scrap prices stood at INR 33,700/t, stable d-o-d.
Today in India, market activities have been subdued as participants continue to embrace a holiday mood. Meanwhile, European suppliers are grappling with container shortages and are keen on destocking before the onset of the winter holidays, as a result of which they are holding offers steady. Offers for shredded scrap from Europe were reported at $416-$418/t CFR Nhava Sheva, while HMS (80:20) was observed at $390-395/t CFR.
Indicative offers for turning boring scraps from Europe were assessed at $375/t CFR, while bids were heard at $355-$360/t CFR.
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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