India: SteelMint's scrap index rises INR 400/t on improved steel prices

SteelMint's domestic steel scrap (end-cutting) rose by INR 400/t d-o-d to INR 38,700/t DAP Mandi Gobindgarh on 14 December, 2023. Majority of the scrap market was good, but key scrap suppliers were withholding materials in anticipation of a price increase ranging from INR 300-500/t in the near future, while scrap buyers are waiting for some price drop in steel so they procure scrap in good levels. In Mandi, sponge iron (CDRI) prices jumped by INR 200/t to INR 32,800/t, while steel-grade pig iron prices in Ludhiana remained stable at INR 39,600/t DAP.

Steel market

Steel ingot prices in Mandi increased by INR 300/t to INR 44,200/t. Other key markets also reported a hike in prices ranging between INR 100/t and INR 400/t. The trading atmosphere in Mandi today saw moderate activity in the semi-finished and finished steel sectors. Notably, Rebar (Fe500) prices surged by INR 200/t, reaching INR 48,600/t. Despite this price movement, the day's overall buying trend was observed to be average.

Overview of other markets

On 14 December, 2023, ship-breaking melting scrap prices in Gujarat's Alang market experienced a d-o-d decline of INR 200/tonne (t), according to SteelMint's assessment. HMS (80:20) prices were assessed at INR 36,000/t exy. Semi-finished steel prices in the region decreased by approximately INR 200/t, with suppliers reducing their offers today due to limited buying inquiries for scrap.

The Raipur market saw an increase in prices for both semi-finished and finished steel, indicating favourable market conditions. However, the overall trade activity in the region was described as decent, reflecting a stable trend today. Billet prices increased by INR 200/t to INR 40,900/t, while rebar (Fe500) prices up by INR 100/t to INR 44,400/t exw.

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 $400-$404/t, which equates to approximately INR 35,863/t (including freight). Meanwhile, in Mumbai, local scrap prices stood at INR 34,000/t, fell by INR 200/t d-o-d.

In India, the demand for imported scrap, particularly shredded scraps, has been subdued, primarily due to pricing challenges. Additionally, numerous mills still maintain sufficient inventory, expected to last until December to mid-January. Consequently, there have been no reports of fresh bookings for shredded scrap as of the current situation. Indicative offers for shredded scrap from the US and Europe were heard at $420-425/t CFR Nhava Sheva.

Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stood at INR 13,050/t.

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