SteelMint's domestic scrap index remains supported due to supply concerns

SteelMint's domestic steel scrap (end-cutting) index inched up by INR 600/tonne (t) to INR 42,900/t DAP Mandi Gobindgarh on 8 December, 2022.

The index moved up as 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 rose by INR 600/t to INR 48,000/t DAP at the time of reporting and price normalisation.

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

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

Snapshots of other markets-

Alang: Ship-breaking melting scrap prices in Gujarat's Alang market increased by INR 400/t d-o-d on 8 December. As per SteelMint's assessment, HMS (80:20) prices stand at INR 39,700/t exy. Rising semi-finished steel prices in the western region and moderate buying interest for scrap by the induction furnace mills in Bhavnagar, Gujarat, pushed suppliers to raise their offers, sources informed.

Hyderabad: Today, semis prices in south India's Hyderabad market moved up by INR 1,000/t to INR 47,000/t, while rebar prices inched up by INR 500/t to INR 51,500/t on account of moderate demand. On the other hand, HMS 80:20 scrap prices were stable at INR 35,800/t 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 36,700/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.

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