SteelMint's scrap index remains range-bound despite marginal rise in steel prices

SteelMint's domestic steel scrap (end-cutting) index remained stable at INR 40,300/tonne (t) DAP Mandi Gobindgarh on 18 July, 2023. In Mandi, limited trade was seen in the scrap market and only need-based deals were heard in contrast to yesterday evening when mills had booked scrap in moderate volumes.

Steel ingot prices in Mandi inched up by INR 100/t to INR 45,400/t at the time of reporting and price normalisation. Meanwhile, prices in other key markets edged up by INR 200-300/t. Due to spot bookings yesterday evening, prices of semi-finished steel have inched up.

In Mandi, "finished steel mills are procuring billet from Rajasthan, Chhattisgarh, Odisha, Uttar Pradesh and West Bengal on price viability," a rebar manufacturer source informed SteelMint.

Billet prices in Mandi are assessed at INR 45,300/t DAP, while those in Raipur stood at INR 41,100/t exw.

Imported scrap market

The imported scrap market witnessed a couple of deals concluded yesterday at workable price levels. Steel producers are more interested in booking HMS-grade material, sources said. In addition, bearish demand for semi-finished and finished steel is weighing on market sentiments.

"Material supply is scarce at the moment due to currency variations," said a scrap trader.

On the other hand, domestic sponge iron prices rose on increased spot trading yesterday. Prices edged up in the range of INR 50-500/tonne (t) to INR 26,000-27,000/t in central and southern India. However, a slight decrease of INR 100-150/t to around INR 25,000/t was seen in Durgapur and Ramgarh due to lack of buying interest.

Overview of other markets

Alang: Ship-breaking melting scrap prices in Alang, Gujarat, rose by INR 500/t d-o-d today. As per SteelMint's assessment, HMS (80:20) prices opened at INR 36,500/t exy. An uptick in semi-finished and finished steel prices in yesterday's trading session and active buying interest for scrap prompted suppliers to raise offers, sources informed.

Durgapur: The steel market in the eastern region seemed to be losing buying confidence, as was evidenced by falling prices. Participants stated that buyers have sufficient material in hand. Sellers reduced offers as raw material prices declined amid poor demand. Market participants are hoping that trades will resume in full swing in the next couple of days.

Price highlights

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

Domestic/imported scrap price gap: Imported melting scrap prices at Nhava Sheva Port were at around $380-$390/t, which equates to approximately INR 34,215/t (including freight). Local scrap (HMS 80:20) prices in Mumbai stood at INR 34,500/t increased by INR 200/t d-o-d.

Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stands at INR 15,050/t.

To see SteelMint's melting scrap assessment, pricing methodology and specification documents, Click here

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