SteelMint's scrap index slides INR 200/t d-o-d amid slow market pace

SteelMint's domestic steel scrap (end-cutting) index was sharply down by INR 200/t d-o-d to INR 38,100/t DAP Mandi Gobindgarh on 14 November, 2023. The scrap market was experiencing a slow pace due to festive week as buyers remined silent today. Moreover, mills were acquiring scrap at a necessary and essential level.

Raw material prices

Sponge iron (CDRI) prices were unchanged d-o-d and settled at INR 33,500/t while in Ludhiana pig iron(steel grade) prices stood at INR 40,000/t DAP.

Steel market

Steel ingot prices in Mandi Gobindgarh declined by INR 300/t, settling at INR 43,700/t. Similarly, other significant markets witnessed price drops ranging from INR 200/t to INR 500/t. The steel market in Mandi Gobindgarh experienced a dip in semi-finished and finished steel amid a subdued atmosphere due to the Diwali festival week. The market is grappling with labour shortages, and transportation is significantly impacted in major areas. Additionally, there is an ongoing shortage of scrap in the market.

Overview of other markets

Mumbai's IF route Rebar (Fe 500) prices were stable and stood at INR 49,200/t exw d-o-d. Lack of trading activities has been spotted at the current offers in the market owing to ongoing festive season. Scrap (HMS 80:20) prices stood at INR 33,500/t DAP. Conversion Spread from scrap to billet is hovering around INR 10,000/t.

The Alang-Gujarat ship-breaking market is currently closed in observance of the Diwali festival week.

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 $390-$395/t, which equates to approximately INR 35,075/t (including freight). Meanwhile, in Mumbai, local scrap prices stood at INR 33,500/t, constant d-o-d.

The demand for imported scrap in India remained low, with many buyers still in a holiday mood owing to the Diwali festival. Furthermore, a disparity between bids and offers persisted, leading buyers to prioritise the procurement of material from the domestic market. Offers for shredded scraps from Europe were assessed at $410-415/t CFR Nhava Sheva, while buyers' expectations were below these levels. HMS (80:20) scraps originating from Europe were evaluated at $390-395/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 13,850/t.

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