India: SteelMint's scrap index rises INR 400/t on active steel demand

SteelMint's domestic steel scrap (end-cutting) index rose by INR 400/t d-o-d to INR 38,100/t DAP Mandi Gobindgarh on 26 October, 2023. Prompt demand for semi-finished and finished steel lifted market sentiments today. As demand escalated, mills sourced scrap in considerable volumes.

About steel market

Steel ingot prices in Mandi increased by INR 350/t to INR 43,800/t at the time of reporting and price normalisation. Meanwhile, prices in other key markets increased by INR 100/t-300/t. Today, the market saw heightened trading activity with a surge in prices for both semi-finished and finished steel. Rebar (Fe500) prices increased by INR 100/t to 48,100/t exw.

Overview of other markets

On 26 October, 2023, ship-breaking melting scrap prices in Alang, Gujarat, saw an uptick of INR 300/t d-o-d. According to SteelMint's assessment, the prices for HMS (80:20) started at INR 36,700/t exy. The rise is attributed to a satisfactory demand from induction furnace steel mills in Bhavnagar and an average trade volume in semi-finished steel.

Raipur's market witnessed a positive demand in finished steel, with Rebar (Fe500) prices elevating by INR 200/t to stand at INR 45,000. Additionally, there was a similar increase in end-cutting scrap prices, which touched INR 38,100/t after a jump of INR 300/t.

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 $371-$375/t, which equates to approximately INR 33,418/t (including freight). Meanwhile, in Mumbai, local scrap prices stood at INR 34,000/t, decreased by INR 500/t d-o-d.

Today, the demand for imported scrap in India continued to remain slow. European suppliers quoted shredded scrap prices in the range of $395-400/t CFR Nhava Sheva basis. However, the actual tradable price, as reported by buyers, is estimated to be in the vicinity of $390-395/t CFR.

According to a trader, "The current state of market activities is rather sluggish, and this trend is expected to persist due to the upcoming elections in India. There are specific factors that influence trading during elections, including limited money flow and project buyers' tendencies to delay their procurement due to concerns about potential changes in government and related funding."

HMS (80:20) scraps were being offered in the range of $375-$380/t CFR Nhava Sheva and $380-$385/t CFR Chennai. NTP scraps from Europe were assessed at around $410-$415/t CFR Chennai.

Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stands at INR 14,200/t.

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

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