North India: Scrap Shortage Supports Billet Prices in Punjab

MS Billet & Ingot prices in Punjab, Mandi Gobindgarh have rallied since last 3-4 days due to shortage of scrap coming from neighbouring markets.

Traders and manufacturers claimed that, only limited quantity of scrap is being arrived since mid last week due to strict GST checking across the entry points of Punjab. Also, overloading is restricted at all entry points leading to delay in transportation.

Hence, taking the advantage of the situation, the local scrap suppliers in Punjab are offering scrap at higher prices. In addition, they are not taking any bulk orders as they are further planning to raise the offer prices in future.

One of the major steel producers in Mandi Gobindgarh, Punjab said that there is limited availability of scrap at the offers of around INR 23,000-23,500/MT for HMS 80:20 grade. The same was traded at around INR 22,500/MT ex-works & excluding GST in the beginning of last week .

There are about 80-100 furnaces in Punjab that produce ingot/billets and the produced material is totally consumed in local rolling mills which are not less than 150.

The furnaces in Punjab melts about 90% of scrap to make one metric ton of Ingot/Billets and the remaining is pig iron or sponge iron. Thus, scrap is an important feed for them and with the recent shortage, the ingot & billet prices in Mandi surge near about INR 1,000/MT in last 3-4 days.

Local traders in Mandi expect steel prices to remain supported till the restrictions at the entry points are removed that has created the raw material shortage.

Today, the billet prices in Mandi are assessed at around INR 32,200-32,400/MT which were on Saturday (15th Feb'20) trading at INR 32,000-32,200/MT ex-works & excluding GST.