SteelMint: India's domestic steel scrap index further rises on supply worries

SteelMint's domestic steel scrap (end-cutting) index increased further by INR 500/t to INR 44,700/t DAP Mandi Gobindgarh on 4 Feb'22.

Due to an overall bearish trend due to steel ingots prices almost touching an all-time high (INR 50,000/t DAP), scrap offers in the market also increased, thereby widening the conversion spread from melting scrap to ingots. Currently, the margins are ranging across INR 10,300-10,500/t.

However, a few trade participants said, scrap arrival in the market has slowed down after the GST officials launched cracked down on unaccountable transactions.

A few rolling mills said that due to the surge in raw material (billets) prices, demand from structural steel producers remained slightly affected due to higher costing as retailers are refraining from booking in large volumes considering the high prices.

Such a market scenario will badly affect contactors also who have been awarded building and infrastructure constructions tender.

Today, 10 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-Busheling 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? In order to bring more transparency in domestic scrap prices in India, we have adopted this robust methodology to ascertain the price trends.

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.