India: SteelMint's scrap index rises INR 300/t d-o-d amid improved steel prices

SteelMint's domestic steel scrap (end-cutting) index moved up by INR 300/t d-o-d to INR 40,800/t DAP Mandi Gobindgarh on 16 August, 2023. Demand for semi-finished steel has improved from yesterday's trading session, and mills are procuring scrap at a moderate price level, as the availability is quite decent in the region.

Semi-finished steel market

Steel ingot prices in Mandi Gobindgarh rose by INR 350/t d-o-d to INR 45,800/t at the time of reporting and price normalisation. Prices in almost all key markets increased in the range of INR 200-600/t. In Mandi, demand for semi-finished steel has slightly improved compared to yesterday's trading session, and ingot-makers are hoping to increase prices of ingots.

Imported scrap market

Scrap price movements might witness a downward trend in the next couple of days as two major Chinese real estate developers have defaulted on payments over the last week.

Offers for bulk shred are assessed at $415-420/t, while shredded scrap in containers are at $435-440/t. Over the last couple of days container offers have risen significantly.

Bid-offer disparity has increased but raw material demand is strong in India, Bangladesh, Pakistan, Vietnam, etc.

Overview of other markets

Ship-breaking melting scrap prices in Gujarat's Alang market inched up by INR 300/t d-o-d on 16 Aug'23. HMS (80:20) prices were assessed at INR 36,300/t exy. Prices of semi-finished steel rose during the last trading session and moderate demand for scrap from the induction furnace-based mills in Bhavnagar, Gujarat, prompted suppliers to hike their offers today.

The Hyderabad market witnessed improved demand for finished steel (rebar), while prices of semi-finished steel and steel scrap remained unchanged. Moreover, demand for semi-finished steel remained weak today. Billet prices in Hyderabad were assessed at INR 42,500/t, while rebar prices stood at INR 46,500/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 are at around $395-$408/t, which equates to approximately INR 36,145/t (including freight). Meanwhile, in Mumbai, local scrap prices stood at INR 35,500/t increased by 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 13,700/t.

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