SteelMint’s domestic steel scrap (end-cutting) index rose by INR 2,700/tonne (t) to INR 39,500/t DAP Mandi Gobindgarh on 21 November, 2022. The index inched up by 7% d-o-d.
In a highly significant development late on 18 November 2022, the government rolled back export duties on steel and steelmaking raw materials. Export duty of 45% on pellets was been reduced to nil. Similarly, the 15% export duty levied on pig iron, hot-rolled and cold-rolled alloy and non-alloyed flat steel products of 600mm or more in width was removed.
The news had the effect of raising overall sentiments in the steel market, with finished steel mills hiking prices by INR 3,000-4,000/t on 19 November. In the Maharashtra and Gujarat markets, increased activity supported the increase.
However, in today’s trading session, these positive sentiments remained hidden, resulting in Mandi-Gobindgarh semis (ingot) prices opening at INR 46,000/t but closing at INR 45,500/t due to low demand.
A trader source said: “There are liquidity issues in the market, which are hindering spot trades”, while other sources said, “retailers and end-users are demanding less steel”.
Considering the current situation of the market, scrap prices are likely to decline further in tune with finished steel in the near term by around INR 500-1000/t.
Market highlights–
End-cutting and billet spread: In Mandi, the end-cutting scrap and billet spread remained unchanged today at INR 6,000/t.
Domestic and imported scrap price gap: Imported melting scrap prices at Nhava Sheva Port were around $378-380/t (including freight, which is approximately INR 34,000/t), while local scrap – HMS (80:20) – prices in Mumbai were assessed at INR 34,500/t.
Raipur sponge iron-billet spread: The current conversion spread (margins) from pellet-based DRI (P-DRI) to steel billets in Raipur stands at around INR 13,000/t.
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