Significant price rise of sponge & billet led to increase in Indian scrap prices by INR 400-1,000/MT (USD 6-15).
HMS Scrap prices in west & south India rose by upto INR 1,000/MT W-o-W. Billet manufacturers in Maharashtra reported that they are currently melting 75-85% domestic scrap and the remaining melting is of sponge.
High cost of sponge may improve scrap procurement
As per SteelMint analysis, continuous price rise of sponge has almost touched the price levels of melting scrap. However, metal recovery in scrap is higher by 8-10% than melt sponge iron. Thus, the manufacturers in domestic market may opt to melt more scrap instead of high cost sponge iron.
For instance, melting scrap offers in Mumbai & Jalna are at INR 18,000-18,300/MT.
Similarly, 80 FeM sponge C-DRI offers in the respective markets are at around INR 17,500-18,000/MT FoR. Both the prices are Inclusive of all taxes & FoR.
A billet manufacturer in Jalna added that they usually required a price gap of around INR 1,000/MT and at present the landed cost of sponge C-DRI & melting scrap is almost same.
Sponge, Billet & Scrap prices as on 16 Sep’16
| Sponge C-DRI | Billet | Scrap | |||||
| Markets | Prices | W-o-W | Prices | W-o-W | Markets | Price | W-o-W |
| Ex-Rourkela | 13,200 | + 1,300 | 21,000 | + 1,200 | Mumbai | 16,100 | + 600 |
| Ex-Bellary | 14,450 | + 1,050 | 23,000 | + 1,500 | Jalna | 16,350 | + 450 |
| Ex-Raipur | 14,500 | + 1,300 | 21,550 | + 1,300 | Chennai | 16,200 | + 1,000 |
Basic prices in INR/MT
Source: SteelMint Research
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