India: SteelMint's scrap index falls for fifth consecutive day

SteelMint's domestic steel scrap (end-cutting) index fell by INR 100/t d-o-d to INR 39,900/t DAP in Mandi Gobindgarh. While there is ample scrap supply in Mandi, the appetite for semi-finished and finished steel is modest. Notably, domestic scrap is in demand. Prices for sponge iron (CDRI) held steady at INR 35,500/t DAP, and steel grade pig iron was assessed at INR 41,700/t.

Steel market

Steel ingot prices in Mandi Gobindgarh dipped INR 100/t d-o-d to INR 45,900/t at the time of reporting and price normalisation. Prices in almost all key markets decreased in the range of INR 100-200/t. Yesterday, the market saw ingot prices dropping in the final trading session, while the finished steel market remained muted, but today buyers were silent in both halves of the trading session and rebar prices fell by INR 100/t to INR 50,600/t d-o-d.

Overview of other markets

On 11 October, the ship-breaking melting scrap prices in Gujarat's Alang held steady d-o-d. SteelMint's evaluation recorded HMS (80:20) prices at INR 38,800/t exy. Despite the restrained buying interest for semi-finished and finished steel in the previous trading session, continued trading at its current rates prompted suppliers to maintain their offers.

In Mumbai, IF route rebar (Fe 500) prices stayed steady d-o-d at INR 51,400/t exw. Trading activity in finished steel was dull, with buyers adopting a wait-and-see approach. Prices for scrap (HMS 80:20) were at at INR 36,000/t DAP, with the differential between scrap to billet at INR 9,700/t.

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 $398-$403/t, which equates to approximately INR 35,712/t (including freight). Meanwhile, in Mumbai, local scrap prices stood at INR 36,000/t, down INR 500/t d-o-d.

In the Indian scrap market, demand for shredded scrap has been rather sluggish recently. The main contributing factor to this subdued demand is the notable price disparity between what sellers are offering and what buyers are willing to pay.

Offers for shredded scraps arriving from Europe are being quoted in the range of $415-$420/t CFR Nhava Sheva. However, potential buyers are setting their sights on a lower price point, aiming for levels around $410/t. HMS (80:20) from West Africa is priced at approximately $400/t CFR Nhava Sheva, while the same grade of scrap from Brazil is available at a slightly lower cost of $395-$398/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 13,350/t.

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