India: SteelMint's scrap index remains stable on moderate steel demand

SteelMint's domestic steel scrap (end-cutting) index remained stable d-o-d at INR 41,000/t DAP Mandi Gobindgarh on 8 August, 2023. No significant trading activity was witnessed in the Mandi market today but mills as well as scrap traders are expecting a strong market this week.

Steel ingot prices in Mandi Gobindgarh remained constant d-o-d at INR 46,000/t at the time of reporting and price normalisation. Prices in almost all key markets decreased in the range of INR 100-300/t. In Mandi, the first half of the trading session was quiet today, but the market saw some spot bookings in semi-finished steel in the second half.

Imported scrap market

Indian scrap buyers witnessed active transactions and, despite escalation in offers, buyers are looking to replenish inventory for post-monsoon production. Additionally, domestic prices are moderate for now, yet finished steel demand remains dull.
"I believe that prices will remain stable for now, but if Indian buyers stop buying then prices may come down as Turkiye is still not active due to poor finished steel demand," said a scrap trader.

Overview of other markets

Ship-breaking melting scrap prices in Alang, Gujarat, remained stable d-o-d on 8 August. HMS (80:20) prices stood at INR 37,500/t exy. Even as buying inquiries for semi-finished and finished steel remained moderate in yesterday's trading session, scrap offers remained supported on active demand as material availability remains a concern.

Hyderabad: Billet and rebar prices remained stable while sponge iron prices rose due to increase in prices of raw pellets in Bellary. Billet prices are assessed at INR 43,000/t while rebar prices stood at INR 47,000/t. Sponge iron (PRDI) prices increased by INR 250/t to INR 29,000/t d-o-d.

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 are at around $388-$395/t, which equates to approximately INR 34,949/t (including freight). Meanwhile, local scrap prices are stood at INR 34,700/t DAP.

Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stands at INR 13,250/t.

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