SteelMint: Domestic steel scrap index rises on healthy finished steel offtake

SteelMint's domestic steel scrap (end-cutting) index moved up by INR 600/tonne (t) to INR 38,200/t DAP Mandi Gobindgarh. Healthy off take of finished long steel products has resulted in re-rollers raising their bids resulting in improvement in semi-finished steel prices.

Traders and retailers always prefer to book material or lift material from old bookings to manage liquidity with evolving market sentiments resulting in healthy bids for semi-finished material (ingot/billet). Amid tightness for semi-finished material, a meeting was held among a few induction furnace units in late evening yesterday due to GST input claims and production utilisation.

The decisions taken in the meeting are not clear as yet as a few central issues remained unanswered amid inactive participation of other major units. However, production utilization may get disturbed in the near term amid strict administrative checking, shared by a few trader sources.

A few more meetings are scheduled in the near-term regarding conversion spread, GST input claims and smooth operations. Furthermore, the market seems to be witnessing slight variations with offers and bids varying by INR 400-500/t and very few transactions being recorded on a d-o-d basis.

Today, 14 sets of trades, indicative prices/bids/offers were recorded in the publishing window.

The Index also derives the HMS 80:20 scrap (Heavy, Med), and CR Sheet cutting prices traded in the region.

Scrap Grade and Spread Calculation: (Mandi Gobindgarh)

Prices in INR/t, DAP (Delivered at Plant)

To see SteelMint's Melting Scrap Assessment, pricing methodology and specification documents, Click here

What is SteelMint Indian scrap index - SteelMint's assessment of Mandi scrap reflects the prices of different melting HMS grade generated and traded in the domestic market. SteelMint gathers and verifies information from buyers and sellers active in the physical spot market. The data obtained by SteelMint, are normalized for yield, dimensions, density, location and other terms of trade to the specifications.

Why this index? India's National Steel Recycling policy mentioned that the efficient use of scrap for steel production becomes very crucial for India as 35-40% share has been envisaged from scrap-based steel production in the journey of 300 mn t pa by 2030. This shall increase the requirement of steel scrap sharply from the present level of around 30 mn t.

Methodology - Market data, including deals, bids, and offers that meet the delivery and quality criteria are considered for price assessments. The highest importance in the price calculation process is assigned to confirmed deals (T1) where either a buyer or seller has provided details of the transaction. Deals of only reputed and trustworthy producers and trading firms are included in the price collection and calculation process. Indicative prices, confirmed bids and offers are also considered valuable for the pricing process (T2). The index has been calculated using an average of T1 and T2 price inputs.

To provide feedback on this index or if you would like to contribute by becoming a data partner, please contact - info@steelmint.com.