SteelMint's scrap index rises marginally even as semis demand softens

SteelMint's domestic steel scrap (end-cutting) index inched up by INR 100/t to INR 42,800/t DAP Mandi Gobindgarh on 12 December, 2022.

In morning trade today in Mandi Gobindgarh, north India, steel ingots prices opened on a positive note and reached up to INR 48,100/t but inched down later in the day to INR 47,800/t at the time of reporting and price normalisation.

In Mandi, the semi-finished and finished steel markets saw need-based purchases taking place but tight scrap supply and limited offers by traders pushed up scrap prices.

Moreover, shortage of scrap arrivel in the market resulted in furnaces operating 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 Alang, Gujarat, declined by INR 500/t d-o-d, as per SteelMint assessment. HMS (80:20) prices are assessed at INR 39,200/t exy. Lack of demand and buying enquiries due to the sharp correction in semis prices and limited trading in finished steel in the region weighed on prices. Scrap suppliers reduced their offers slightly as a result.

Raipur: Today, semis prices in central India-based Raipur market moved up by INR 300/t to INR 44,100/t, while rebar prices decreased by INR 200/t to INR 47,800/t on account of limited demand. On the other hand, HMS 80:20 scrap prices were increased by INR 200/t to INR 39,000/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 $418-420/t (including freight, which comes to approximately INR 36,900/t), while local scrap - HMS (80:20) - prices in Mumbai were assessed at INR 36,500/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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