SteelMint's scrap index shows a decline amid muted semi-finished market

SteelMint's domestic steel scrap (end-cutting) index edged down by INR 200/t d-o-d to INR 38,900/t DAP Mandi Gobindgarh on 31 October, 2023.

The scrap market in Mandi Gobindgarh saw decent trading, with mills focusing on procuring domestic scrap. At the same time, the market for semi-finished steel experienced a lack of buying activity, accompanied by an INR 250/t drop in ingot prices for the day. Furthermore, a shortage of scrap continued to affect the major market, with scrap suppliers facing some challenges in meeting the mills' demands. Additionally, there were limitations in the movement of trucks due to GST checks over the past couple of days.

Steel market

Steel ingot prices in Mandi Gobindgarh declined by INR 250/t, settling at INR 44,600/t. Similarly, other significant markets witnessed price drops ranging from INR 200/t to INR 400/t. The trading environment in Mandi for semi-finished and finished steel was subdued today compared to the previous few days, with buyers remaining unresponsive.

Overview of other markets

In the Alang market of Gujarat, ship-breaking melting scrap prices held firm on 31st of October compared to the previous day. SteelMint's assessment indicates that HMS (80:20) was priced at INR 37,200/t ex-yard. The steadiness in semi-finished steel rates in Gujarat, combined with moderate inquiries from scrap buyers, encouraged scrap suppliers to keep their offers unchanged today.

In today's Jalna market, situated in western India, the prices of semis fell by INR 100/t to INR 43,700/t, while rebar prices decreased by INR 700/t to INR 49,700/t. On the other hand, HMS 80:20 prices are up by INR 100/t to INR 35,200/t. According to market sources, mill owners are encountering challenges in selling rebar and are struggling to procure an adequate quantity of scrap in the mills due to the Maratha reservation protest. To address this issue, mills have been compelled to raise scrap purchase prices, although mill owners remain uncertain whether they will secure a sufficient quantity of the material.

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 $376-$380/t, which equates to approximately INR 33,844/t (including freight). Meanwhile, in Mumbai, local scrap prices stood at INR 34,000/t, unchanged d-o-d.

Today in India, the demand for imported scrap remained moderate. Shredded scrap from Europe was offered at $400-$405/t CFR Nhava Sheva, while HMS scraps were priced at $380-$385/t CFR.

Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stands at INR 14,100/t.

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

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