SteelMint's domestic scrap index inches up by INR 100/t amid moderate demand

SteelMint's domestic steel scrap (end-cutting) index slightly rose by INR 100/t d-o-d to INR 37,300/t DAP Mandi Gobindgarh on 29 November, 2023. The scrap market is displaying moderate trade activity, primarily driven by mills sourcing domestic scrap. However, given the current price levels, imported scrap is not a feasible option for mills at this time.

Raw materials

The prices of sponge iron (CDRI) in Mandi Gobindgarh declined by INR 200/t, settling at INR 31,800/t. Simultaneously, steel grade pig prices in Ludhiana were assessed at INR 39,800/t, stable d-o-d.

Steel market

The steel ingots prices in Mandi Gobindgarh witnessed an uptick, rising by INR 200/t and stabilizing at INR 42,900/t at the time of reporting and price normalisation. Simultaneously, prices in almost all significant markets observed an escalation, ranging from INR 100/t to INR 400/t. The semi-finished steel market experienced moderate demand throughout both halves of the trading session. However, there is optimism that spot demand will contribute to an upward trend in market prices. Furthermore, the finished steel market observed satisfactory operations today, with the pace of trade activity currently at a slower rate.

The prices of rebar (Fe500) remained steady at INR 47,500/t today, showing no change in the current market conditions.

Overview of other markets

Ship-breaking melting scrap prices in Gujarat's Alang market stayed constant d-o-d on 29 November 2023. HMS (80:20) prices were evaluated at INR 35,800/t exy. Although semi-finished and finished steel prices experienced a decline of around INR 500-400/t in the region during yesterday's trading session, limited buying inquiries for scrap compelled suppliers to keep their offers unchanged today. HMS (80:20) prices in the region saw a weekly decrease of INR 700/t.

Price highlights

End-cutting-billets spread: In Mandi, the end-cutting scrap and billets spread stood at INR 5,500-6,000/t.

Domestic vs imported scrap: Imported melting scrap prices at Nhava Sheva Port were at around $383-$390/t, which equates to approximately INR 34,693/t (including freight). Meanwhile, in Mumbai, local scrap prices stood at INR 33,500/t, fell by INR 500/t d-o-d.

The demand for imported scrap in India has been slow, as buyers are staying on the sidelines, partly due to the availability of cost-effective scraps domestically and also because of bid-offer disparities. Shredded scrap from Europe is indicative at $415/t CFR Nhava Sheva.

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

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