India: Foundry scrap prices extend rally on tight supply

• Price hike in late-Jan CR busheling auction leads to tight supply
• Casting margins under pressure as raw material costs escalate

Foundry-grade scrap prices in India continued their sharp uptrend in the week ended 17 February 2026, with western markets leading gains amid acute supply tightness. The rally, initially triggered by higher auction prices of CR busheling scrap in late January, has now translated into sustained strength in prices of foundry-grade scrap.

In Kolhapur, plate-cutting scrap (LS & LP, loose) increased further by INR 500/t w-o-w to INR 38,000/t, extending the cumulative rise to INR 1,500/t over the past two weeks. The price trajectory marks a decisive rebound from December lows of around INR 35,600-36,000/t, reflecting tightening yard inventories and higher replacement costs.

Auctions tighten spot liquidity

Market participants said material inflows of foundry-grade scrap remained thin, as January-end CR busheling auctions cleared at elevated levels, prompting suppliers to raise offers. Notably, in a prominent automaker’s auction for 5,600 t of low-manganese CR busheling scrap from its Gurgaon-Haryana plant on 28 January, bids reached INR 36,800-37,000/t ex-works, up by around INR 600/t from the 8 January auction. The rise reflects buoyant steel market sentiments, with primary producers hiking hot-rolled and cold-rolled coil prices.

However, foundries continued need-based procurement, even as sellers maintained firm stances amid constrained availability.

Eastern prices also stayed elevated, with Kolkata plate-cutting hovering near recent highs, supported by limited collections and firmer realisations. In the south, Chennai prices remained firm, while Coimbatore held at premium levels after last week’s sharp correction, indicating resistance at higher thresholds.

Cost push outweighs demand

The current upcycle appears supply-driven rather than demand-led. Casting offtake from automotive and engineering segments remained steady but not aggressive enough to justify the magnitude of the raw material spike. As a result, conversion margins for foundries are tightening, particularly for units dependent on low-manganese CR-busheling.

Outlook

BigMint expects foundry scrap prices to remain firm next week as supply tightness persists. However, further upside may face resistance if casting demand fails to absorb rising input costs and procurement slows at higher levels.