SteelMint: Mandi scrap index rises by INR 400/t amid supply crunch

SteelMint's domestic steel scrap (end-cutting) index rose by INR 400/tonne (t) to INR 43,300/t DAP Mandi Gobindgarh on 9 December, 2022.

Scrap supply has still not improved in the domestic market. This, coupled with a rise in semis prices, lifted the index.

Scrap buyers raised their bids to secure adequate quantities backed by a marginal rise in semi-finished steel prices. Ingots prices in the Mandi market today rose by INR 300/t to INR 48,300/t DAP, at the time of reporting and price normalisation.

Due to the continued shortage of scrap in the market, the conversion spread of mills have come down by another INR 1,000/t today.

However, there are a few other factors that could support scrap prices in the short term. As iron ore and pellets prices are on the rise, sponge iron prices are also increasing. It is not feasible to procure sponge iron at such high levels. Secondly, imported scrap is also unviable.

Snapshots of other markets-

Alang: Ship-breaking melting scrap prices in Alang, Gujarat, opened stable d-o-d today. As per SteelMint assessment, HMS (80:20) prices are assessed at INR 39,700/t exy. Despite an increase in semi-finished as well as finished steel prices and moderate trading activity in the last trading session, limited buying enquiries for scrap at current prices prompted suppliers to keep their offers stable.

Jalna: In western India-based Jalna market, billets and rebars prices remained stable today, while HMS 80:20 prices decreased by INR 200/t to INR 38,400 DAP.

Market highlights-

End-cutting and billets spread: In Mandi, the end-cutting scrap and billets spread is at around INR 6,000-6500/t.

Domestic and imported scrap price gap: Imported melting scrap prices at Nhava Sheva Port were at around $412-420/t (including freight, which comes to approximately INR 36,800/t), while local scrap - HMS (80:20) - prices in Mumbai were assessed at INR 36,600/t.

Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stands at around INR 13,300/t.

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

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