SteelMint's benchmark scrap index drops by INR 500/t

SteelMint's domestic steel scrap (end-cutting) index fell by INR 500/tonne (t) to INR 40,700/t DAP Mandi Gobindgarh on 3 December 2022.

Today, steel ingots prices in Mandi saw a sharp correction of INR 300/t d-o-d, falling to INR 46,100/t at the time of reporting and price normalisation.

According to a scrap trader, scrap availability in Mandi Gobindgarh is very poor, and mills are unable to get enough scrap. A shortage of vehicles also prevents material from coming outside the state market.

Moreover, a very poor sales situation resulted in most furnaces operating 12 hours a day. There are also liquidity issues in the market, which are hindering spot trades.

Additionally, a mill owner said that due to the shortage of semis steel in Mandi, the mills were procuring billets from Raipur and Durgapur, as the price gap has increased by INR 4,000/t between Raipur and Mandi.

Market highlights-

End-cutting and billet spread: In Mandi, the end-cutting scrap and billet spread was at INR 6,000-6,500/t.

Domestic and imported scrap price gap: Imported melting scrap prices at Nhava Sheva Port were at $380/t (including freight, which comes to approximately INR 33,100/t), while local scrap - HMS (80:20) - prices in Mumbai were assessed at INR 35,200/t.

Raipur sponge iron-billet spread: The current conversion spread (margins) from pellet-based DRI (P-DRI) to steel billets in Raipur stands at around INR 12,600/t.

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