SteelMint: India's domestic steel scrap index plunges by INR 3,800/t on slow finished steel offtake

SteelMint's domestic steel scrap index for end-cutting material plunged by INR 3,800/t to INR 49,200/t DAP Mandi Gobindgarh on 12 Mar'22.

Reasons behind the price correction:

• Limited buying interest from rolling mills for semi-finished steel on expectation of a price correction in the near term. Meanwhile, finished steel buying also weakened.
  
  
• A slight correction in semi-finished steel prices widened the conversion spread. The conversion spread from old melting scrap to semi-finished steel currently hovers around INR 15,500-16,000/t (+/- INR 100-200/t) among small and large induction furnaces.
  
  
• Scrap availability in the market is high.
  
  

On the other hand, a few small induction furnace units were heard to be utilising their inventory and did not place a single bid for scrap amid highly fluctuating trends.

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? 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.