SteelMint's domestic scrap index rises by INR 300/t d-o-d amid pre-festive demand for semis

SteelMint's domestic steel scrap (end-cutting) index sharply moved up by INR 300/t to INR 38,300/t DAP Mandi Gobindgarh on 9 November 2023. The scrap movement in Mandi Gobindgarh has been good today, even though the festive season has started. This is because the mills are procuring scrap in good levels, despite the unavailability of labour and the minimum work being done. Moreover, scrap shortage persisted in the market.

Steel ingot prices in Mandi Gobindgarh increased by INR 400/t to INR 44,000/t, while prices in other major markets increased by INR 200/t to INR 400/t. In Mandi Gobindgarh, demand for semi-finished steel has improved, while demand for finished steel remained moderate.

A mill owner informed SteelMint, "Semi-finished buyers in Mandi remained active today, leading to pre-holiday spot bookings and a slight uptick in steel prices. This suggests that there is still some demand for steel in the Mandi market, despite the ongoing slow trading activity. The pre-holiday spot bookings indicate that buyers are anticipating an increase in demand in the coming weeks, as people prepare for the holiday season."

Overview of other markets

Ship-breaking melting scrap prices inched down by INR 100/t d-o-d in Gujarat's Alang market on 9 November, 2023. SteelMint assessed opening prices of HMS (80:20) at INR 36,200/t ex-yard. Limited trade in semi-finished and finished steel in the last trading session, coupled with moderate buying inquiries for scrap put pressure on prices of the raw material.

The steel market in Raipur has been slightly up today, with moderate trading activity seen over the past three to four days. Mills are offering discounts on finished steel (rebar) in an attempt to boost the market. Billet prices in the region edged up by INR 250/t to INR 41,250/t, while rebar prices stood at INR 44,400/t, improved by INR 100/t d-o-d.

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 $382-$387/t, which equates to approximately INR 34,436/t (including freight). Meanwhile, in Mumbai, local scrap prices stood at INR 33,500/t, constant d-o-d. The demand for imported scrap in India was observed limited as buyers decided to procure scrap from the domestic market on cheaper availability. Indicative offers for shredded scrap from Europe were heard at $405-$410/t CFR Nhava Sheva, while HMS (80:20) scraps were reported at $385-$390/t CFR.

A buyer said: "Turkey seems to reflect minimal demand for finished steel. The local market, as of today, does not appear to be responding to scrap prices. It's possible that Turkish buyers are either concerned about future supply or optimistic that demand for finished steel will eventually pick up, perhaps influenced by sentiments in China."

Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stands at INR 14,050/t.

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