India: SteelMint's scrap index rises INR 200/t on improved steel prices

SteelMint's domestic steel scrap (end-cutting) rose by INR 200/t d-o-d to INR 39,200/t DAP Mandi Gobindgarh on 18 October, 2023. Mills are demonstrating a preference for domestic steel scrap but liquidity concerns prevail in the market.

Steel market

Steel ingot prices in Mandi increased by INR 100/t to INR 44,900/t at the time of reporting and price normalization. Meanwhile, prices in other key markets increased by INR 100/t. The evening trading session on the previous day was quite advantageous for buyers of ingots, with most mills selling at INR 44,800/t. However, today, steel ingot prices rose by INR 100/t, and buyers have maintained a cautious approach, anticipating potential price reduction. Today, rebar prices in the region edged down by INR 100/t to INR 49,400/t exw.

Overview of other markets

A decrease of INR 500/t in ship-breaking melting scrap prices was observed in Alang, Gujarat, with HMS (80:20) prices at INR 37,200/t exy. With semi-finished steel prices in the region falling by about INR 500/t yesterday and subdued interest for scrap at current prices, suppliers felt compelled to adjust their prices downward. Alang HMS (80:20) scrap prices dropped INR 1,600/t w-o-w.

Slow momentum persisted in the Raipur market. While deals remained scarce, mills are hopeful of the market rebounding in the near term. Billet prices rose by INR 200/t, settling at INR 42,450/t, whereas rebar prices decreased by INR 300/t to INR 45,700/t d-o-d.

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 $388-$385/t, which equates to approximately INR 34,502/t (including freight). Meanwhile, in Mumbai, local scrap prices stood at INR 35,500/t, stable d-o-d.

Today, demand for imported scrap in India remained weak due to a lack of buying interest reflecting sluggishness in the domestic steel market. Offers for shredded scrap from Europe were assessed at $400-405/t CFR Nhava Sheva, while buyers' bids were reported at $395-400/t CFR and below. HMS (80:20) scrap from Europe was offered at $388-392/t CFR Nhava Sheva.

A steel mill source in south India said, "Market sentiments are not favourable at the moment. We are refraining from making purchases because we currently have substantial steel inventory."

Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stands at INR 13,850/t.

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