SteelMint's ferrous scrap index consistently stays neutral amid moderate trade

SteelMint's domestic steel scrap (end-cutting) index on 17 November, 2023, remained stable at INR 38,300/t DAP Mandi Gobindgarh. In the domestic scrap market, mills were seen actively engaged in purchases. However, traders are encountering challenges in sourcing scrap, as there has been a slowdown in transactions in recent days. However, the industry is expected to recover once the festive season is over and scrap dealers resume normal operations.

Mandi Gobindgarh steel mills are facing a shortage of scrap due to the ongoing festive season (Diwali and Chaat Puja) in scrap-generating states like Haryana, Uttar Pradesh, and Himachal Pradesh. Additionally, the upcoming elections in Rajasthan is a key reason why market movement remains slow.

Steel ingot prices in Mandi Gobindgarh remained stable at INR 44,000/t at the time of reporting and price normalisation. In contrast, prices in the majority of markets decrease in the range of INR 100-200/t. Trade activity in both the semi-finished and finished steel markets in Mandi Gobindgarh was moderate. Mills are expecting the market will rise next week, with an expected increase in demand.

Raw material prices

Prices of sponge iron (CDRI) remained unchanged d-o-d at INR 33,300/t. In Ludhiana, prices of pig iron (steel grade) were recorded at INR 39,900/t, unchanged d-o-d.

Overview of other markets

On 17 November, ship-breaking melting scrap prices in Gujarat's Alang market dropped INR 200/t d-o-d, as per SteelMint's evaluation. HMS (80:20) prices were at INR 36,300/t ex-yard. Suppliers reduced their offers today due to moderate trade in semi-finished steel during the previous trading session and limited buying inquiries for scrap following the festive holidays.

In Hyderabad, the semi-finished and finished steel markets experienced a downward trend in prices with limited activity. No significant trade activity was observed in the market. Billet prices declined by INR 500/t, standing at INR 43,000/t, while rebar prices saw a drop of INR 500/t to INR 47,500/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 $387-$395/t, which equates to approximately INR 35,090/t (including freight). Meanwhile, in Mumbai, local scrap prices stood at INR 34,000/t, increased by INR 300/t d-o-d.

Today in India, trading activities remained subdued post-Diwali festival, with major market participants continuing their holiday mode.

Shredded scrap is offered at a maximum of $416-$418/t, while HMS (80:20) ranges from $396 to $398/t CFR West Coast. The market anticipates increased activity next week if the disparity between buyers and sellers lessens, leading to more negotiations.

Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stands at INR 13,900/t.

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