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

SteelMint's domestic steel scrap (end-cutting) index remained unchanged d-o-d at INR 40,400/t DAP Mandi Gobindgarh on 6 October 2023. Due to dwindling imported scrap availability, mills in Mandi have shifted their focus to local suppliers. Despite this shift, the market reflected an average demand for semi-finished and finished steel today. Furthermore, the market continued to grapple with liquidity challenges and slight scrap shortage.

Steel ingot prices in Mandi remained stable at INR 46,500/t at the time of reporting and price normalisation. The regional market experienced average trade activity in both semi-finished and finished steel sectors. Meanwhile, rebar prices saw a d-o-d increase of INR 400/t, reaching INR 51,200/t.

Overview of other markets

The ship-breaking melting scrap market in Alang, Gujarat, recorded an increase of INR 500/t d-o-d on 6 October 2023. With HMS (80:20) prices positioned at INR 39,000/t ex-yard according to SteelMint's analysis, the hike is attributed to strengthened trading in semis and finished steel in the west, alongside decent buying inquiries for scrap the day before. Alang HMS(80:20) scrap prices were up by INR 700/t w-o-w.

In Hyderabad, there was a noticeable increase in trade activity for both semi-finished and finished steel, whereas the scrap prices remained unchanged d-o-d amidst standard trading. The price for billets climbed by INR 250/t to INR 46,000/t, while the rate for rebars stayed consistent at INR 51,000/t.

The Raipur market experienced a muted demand in semi-finished steel, leading to a drop of INR 100/t in billet prices, settling at INR 43,900/t. Meanwhile, finished steel (rebar) prices increased by INR 100/t, reaching INR 47,300/t amidst average trading activity.

Price highlights

End-cutting-billets spread: In Mandi, the end-cutting scrap and billets spread stood at INR 5,500-6,100/t.

Domestic vs imported scrap: Imported melting scrap prices at Nhava Sheva Port were at around $395-$398/t, which equates to approximately INR 35,319/t (including freight). Meanwhile, in Mumbai, local scrap prices stood at INR 36,500/t, stable d-o-d.

The demand for imported ferrous scrap in India is currently sluggish, with only a limited number of deals being reported. It is noteworthy that these deals have been settled at lower price levels, as suppliers are actively reducing their inventories.

Offers for shredded scrap from Europe were heard at $410-415/t CFR Nhava Sheva, while, HMS (80:20) were pointed at $395-400/t CFR. NTP scrap were available at $435-440/t CFR Chennai.

A southern India based mill official said: "We have procured ample stocks earlier, thus we will return back by the end of October."

Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stands at INR 13,150/t.

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