India: SteelMint's scrap index touches 8-week high on improved steel prices

SteelMint's domestic steel scrap (end-cutting) index rose by INR 200/t d-o-d to INR 41,800/t DAP Mandi Gobindgarh on 26 August, 2023. The index touched a 8-week high as demand and prices of semi-finished and finished steel up. Local mills are procuring scrap in good volumes, as imported scrap is also reaching Mandi Gobindgarh in good proportions. Due to the good availability of scrap in the region, there is a disparity in scrap prices between buyers and sellers in the market.

Sponge iron (CDRI) prices in Mandi increased by INR 1,000 t w-o-w, while pig iron prices in Ludhiana are almost stable w-o-w.

About semis' market

Steel ingot prices in Mandi edged up by INR 300/t to INR 46,900/t at the time of reporting and price normalisation. Meanwhile, prices in other key markets increased in the range of INR 100-300/t. Demand and trade activities are better in Mandi. In Mandi ingot prices is up by INR 700/t w-o-w.

"Mills in the area are aiming for a healthy increase in steel pricing, it is predicted that ingot prices will exceed INR 47,000/t". A source informed SteelMint.

Weekly imported market

India: Offers for European shredded scrap in India remained steady at $425-$430/t w-o-w. Recent transactions at CFR Nhava Sheva were settled within the range of $425-$430/t, while buyers continued to present quotes around $420-$422/t CFR. Despite minor fluctuations witnessed this week, the Indian market maintains optimism about the current price trend, with deal-making remaining largely unaffected. Forecasts indicate the potential for prices to touch the $440/t mark over the next couple of weeks, driven by anticipated increased inquiries, fostering positive expectations.

Recent sales of HMS (90:10) and LMS bundles from Middle Eastern origin (Kuwait) to Nhava Sheva and Chennai were reported at levels of $425-$430/t and $385/t, respectively.

Europe-origin HMS (80:20) offers to Nhava Sheva CFR ranged between $408-$410/t, while bids varied from $398-$400/t. For the West African HMS (80:20), pricing stood at $402-$404/t for the west coast and $408/t for the southern coast of India.

Overview of other markets

Ship breaking melting scrap prices in Alang, Gujarat, rose by INR 300/t d-o-d on 26 Aug'23. As per SteelMint's assessment, HMS (80:20) prices opened at INR 38,000/t exy. Increasing semi-finished steel prices in the western region and active buying of scrap by Bhavnagar-based induction furnace mills resulted in a price hike by suppliers.

Alang ship breaking market seen INR 700/t increase w-o-w on HMS(80:20) scrap prices.

Weekly changes

The Jalna market rose by INR 1,000/t w-o-w in semi finished(billet) prices while finished steel(rebar) prices up by INR 900/t.

The southern region (Chennai) climbed by INR 1,000/t w-o-w in semi-finished (billet) prices.Finished steel prices moved up by INR 1500/t while moderate work was seen in the major market.

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 $404-$410/t, which equates to approximately INR 36,044/t (including freight). Meanwhile, in Mumbai, local scrap prices stood at INR 36,300/t, stable 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 13,350/t.

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