SteelMint's benchmark scrap index down marginally on conversion spread improvement

SteelMint's domestic steel scrap (end-cutting) index decreased by INR 700/tonne (t) to INR 44,600/t DAP Mandi Gobindgarh on 4 January, 2023.

In morning trade today in Mandi Gobindgarh, north India, steel ingots prices opened on a negative note, decreasing by INR 500/t to INR 49,600/t but inched up later in the day to INR 49,900/t at the time of reporting and price normalisation.

The conversion spread (margins) of old scrap to induction furnace (IF)-route steel ingot improved by INR 300/t to INR 10,500/t d-o-d from INR 10,200/t yesterday.

Trading in semi-finished and finished steel remained limited with only needs-based purchases taking place. Also, liquidity issues persisted in the market, slowing down buying activity.

HR strip patra (148-200mm, 2mm thick) prices declined by INR 100/t to INR 51,000/t exw in Raipur, while prices fell by INR 200/t to INR 50,900/t in Mandi Gobindgarh, excluding GST at 18%.

Ship-breaking melting scrap prices dropped by INR 200/t d-o-d in Gujarat's Alang market on 4 January, 2023, SteelMint's assessment shows. HMS (80:20) prices stand at INR 39,300/t ex-yard. A fall in semi-finished steel prices was observed in the late hours of yesterday's trading session. This, along with subdued trading in the region, pushed scrap suppliers to cut their offers.

Price highlights

End-cutting and billets spread: In Mandi, the end-cutting scrap and billets spread was at around INR 5,000-5,200/t.

Domestic and imported scrap price gap: Imported melting scrap prices at Nhava Sheva Port were at around $430/t (including freight, which equates to approximately INR 37,800/t), while local scrap - HMS (80:20) - prices in Mumbai were assessed at INR 38,500/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 15,050/t.

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