SteelMint: India's domestic steel scrap index inches down on bearish sentiments, supply worries

SteelMint's domestic steel scrap (end-cutting) index fell by INR 300/t to INR 44,200/t DAP Mandi Gobindgarh on 3 Feb'22.

An overall bearish market trend, due to lack of demand in semi-finished as well as finished steel and logistics constraints amidst continuous rainfalls in the major market, prompted buyers to lower their bids today.

Meanwhile, with steel ingots prices touching an all-time high, scrap offers in the market have also increased, thereby widening the conversion spread from melting scrap to ingots. Currently, the margins are ranging INR 10,300-10,500/t.

On the other side, standalone re-rollers (structural steel producers) said that they are currently running their mills for only 4-5 days in a week due to weak demand for finished products.

Furthermore, imported scrap prices are almost on par with domestic prices, making imports cost-effective. Current offers of Middle East-origin HMS 80:20 are at $493-495/t which translates into a landed cost of INR 40,500-40,700/t DAP while domestic scrap prices are at INR 40,700-41,000/t.

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 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? 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.