India: SteelMint's scrap index rises marginally d-o-d despite sluggish sentiments

SteelMint's domestic steel scrap (end-cutting) index inched up by INR 100/t d-o-d to INR 41,400/t DAP Mandi Gobindgarh on 5 July, 2023. However, market sentiments were negative with limited trade inquiries seen. Only a few buyers were booking low volumes of scrap while major mills remained interested in procuring sponge iron for steel making due to relatively lower prices.

Semis' market trend

In Mandi, steel ingot prices edged up by INR 100/t to INR 46,500/t at the time of reporting and price normalisation. Prices in almost all the key markets increased by INR 100/t. Demand for semi-finished steel remained below average. Today, Mandi saw minimal transactions in semis as well as less buying activity. As the monsoons have started in the region, it will impact the finished steel market activities.

"Ingot trade inquiries were modest in the first half of the trading session, while in the second half, as prices increased by INR 100/t to INR 46,500/t, prospective buyers stayed silent," a ingot maker said.

Imported scrap market

Indian imported ferrous scrap offers remained on the lower side. Sellers were quoting $405-410/t for European shredded scrap, as per a buyer source. But due to the soft market, no buyers are active. Meanwhile, the key buyers are preferring bulk bookings due to upcoming winter restocking to streamline production flow after the monsoon.

Overview of other markets

Alang: Today, ship-breaking melting scrap prices were steady d-o-d. Prices for HMS (80:20) were INR 37,500/t exy. Even though buying inquiries for semi-finished and finished steel were limited in yesterday's trading session, scrap offers were sustained by moderate demand due to concerns over material availability.

Durgapur: Due to limited buying, the market observed a significant fall in semi-finished and finished steel offers in the eastern region. Sellers are under pressure to reduce offers in order to liquidate stocks. As a result of increased inventories and a lack of spot demand, market insiders anticipate that prices will continue to be under pressure in the near term.

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 were at around $392-$396/t, which equates to approximately INR 34,779/t (including freight). Local scrap (HMS 80:20) prices in Mumbai stood at INR 35,000/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 15,600/t.

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