SteelMint’s domestic steel scrap (end-cutting) index moved up by INR 300/tonne (t) to INR 38,400/t DAP Mandi Gobindgarh.
Prime factors supporting this marginal hike were the slight price improvement in semi-finished steel products amid measured supply in the market.
In addition, very few deals happened till the publishing of this index as scrap sellers held their offers in anticipation that the market would be on the positive side which would allow them to get better margins during trade as per the conversion spread.
However, standalone re-rollers, particularly those producing structural steel products, said the conversion spread from ingots to finished products is getting weaker due to poor demand from buyers.
Further, trade participants believe that the current prevailing scrap shortage only hold semi-finished steel prices at the current levels. When scrap arrival improves in the market, semis’ prices would correct downward.
Meanwhile, small induction furnaces have already opted for production cuts due to less procurement of scrap, as per market sources.
Today, 13 sets of trades, indicative prices/bids/offers were recorded in the publishing window.
The Index also derives the HMS 80:20 scrap (Heavy, Med), and CR Sheet cutting prices traded in the region.
Scrap Grade and Spread Calculation: (Mandi Gobindgarh)
Prices in INR/t, DAP (Delivered at Plant)
To see SteelMint’s Melting Scrap Assessment, pricing methodology and specification documents, Click here
What is SteelMint Indian scrap index – SteelMint’s assessment of Mandi scrap reflects the prices of different melting HMS grade generated and traded in the domestic market. SteelMint gathers and verifies information from buyers and sellers active in the physical spot market. The data obtained by SteelMint, are normalized for yield, dimensions, density, location and other terms of trade to the specifications.
Why this index? India’s National Steel Recycling policy mentioned that the efficient use of scrap for steel production becomes very crucial for India as 35-40% share has been envisaged from scrap-based steel production in the journey of 300 mn t pa by 2030. This shall increase the requirement of steel scrap sharply from the present level of around 30 mn t.
Methodology – Market data, including deals, bids, and offers that meet the delivery and quality criteria are considered for price assessments. The highest importance in the price calculation process is assigned to confirmed deals (T1) where either a buyer or seller has provided details of the transaction. Deals of only reputed and trustworthy producers and trading firms are included in the price collection and calculation process. Indicative prices, confirmed bids and offers are also considered valuable for the pricing process (T2). The index has been calculated using an average of T1 and T2 price inputs.
To provide feedback on this index or if you would like to contribute by becoming a data partner, please contact – info@steelmint.com.
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