India: SteelMint's scrap index tumbles to over 7-month low
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SteelMint's domestic steel scrap (end-cutting) index dipped INR 400/t d-o-d to INR 40,400/t DAP Mandi Gobindgarh on 14 July, 2023. The index has hit the lowest level in seven-and-a-half months as these prices had last been seen in late November, 2022.
In Mandi, due to scrap shortage and modest demand for steel, scrap procurement is weak as mills have cut down production amid dull market conditions and transport issues due to heavy rains.
Market scenario
The downward trend continues in north India's steel market, as need-based buying was observed for scrap and work flow was modest. The small furnaces (8/10 t furnace) are almost on the verge of closing down due to scrap shortage, while steel mills are under selling pressure.
Semi-finished steel market
Steel ingot prices in Mandi fell by INR 300/t to INR 45,400/t at the time of reporting and price normalisation. Meanwhile, prices in other key markets decreased in the range of INR 200-300/t. Mills are running under 10-12 hours, as selling pressure continues in the market and demand for semi-finished and finished steel declines.
Overview of markets
Ship-breaking melting scrap prices in Gujarat's Alang decreased by INR 300/t d-o-d on 14 Jul'23, as per SteelMint's assessment. HMS (80:20) prices were assessed at INR 36,000/t exy. Semi-finished steel prices fell in yesterday's trading session in Bhavnagar, while limited trading activity for scrap prompted suppliers to cut their offers today.
The Raipur market witnessed limited transactions in semis and finished steel as buyers remained silent. Billet prices are at INR 40,950/t, down by INR 300/t, while rebar prices have been assessed at INR 43,600/t, down INR 400/t d-o-d.
In the Chennai market today, prices of semis and finished steel remained stable at INR 43,500/t and INR 48,000/t. Meanwhile, HMS 80:20 prices fell by INR 200/t to INR 32,300/t. The conversion spread between HMS 80:20 to billets currently stand at INR 11,200/t, up by INR 200/t d-o-d.
The market observed limited demand for finished steel. According to market sources, mill owners are closely monitoring prices of imported scrap, and if they see a decrease of approximately $5-10, they will start bookings.
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 $385-$390/t, which equates to approximately INR 34,249/t (including freight). Local scrap (HMS 80:20) prices in Mumbai stood at INR 34,000/t exw.
Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stands at INR 14,850/t.
To see SteelMint's melting scrap assessment, pricing methodology and specification documents, Click here
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