India: Chennai ferrous scrap prices increase by INR 1,000/t w-o-w amid supply shortage

• Scrap prices rise amid tight supply, firm steel prices
• Steel billet prices increase by INR 1,000/t w-o-w

Chennai HMS (80:20) scrap prices strengthened by INR 1,000/t w-o-w to INR 34,300/t on 10 September 2026, with a further INR 300/t d-o-d increase, as per BigMint assessment. In the semi-finished steel segment, billet prices rose by INR 1,000/t w-o-w to INR 47,500/t, although they remained stable on a daily basis. Rebar prices also remained unchanged d-o-d at INR 50,000/t ex-works but gained INR 500/t w-o-w amid improved trading activity.

The continued weekly appreciation across key ferrous products has strengthened market sentiment. Improved finished-steel demand, along with firm raw material prices and limited imported scrap bookings, is providing support to the domestic scrap market.

Imported and domestic price trends

Import scrap trading in Chennai remained active for selected grades, although a notable bid-offer gap persisted. Market participants said Australia-origin shredded scrap was offered at $380-382/t CFR Chennai, while HMS (80:20) was quoted at $350-352/t CFR. Buyers were bidding $10-15/t below these levels, indicating continued price resistance.

Despite the gap, a 1,500 t parcel of UK-origin busheling scrap was booked at $420/t CFR Chennai. In another transaction, 500 t of Poland-origin turning scrap was booked at $330/t CFR Chennai. The reported deals indicate that mills continue to secure specific grades where requirements justify higher prices, while overall import buying remains selective and price-sensitive.

In the domestic market, HMS (80:20) scrap prices were quoted at INR 34,000-34,500/t for spot transactions with immediate payment, while extended credit-term deals were concluded at INR 34,500-35,000/t. Overall, market activity remained concentrated within the INR 34,000-35,000/t range, highlighting balanced demand-supply dynamics despite cautious procurement sentiment. Market participants indicated that payment terms, procurement volumes, and mill-specific requirements continued to influence transaction prices, with premiums observed for deals involving longer credit periods.

Buyer-supplier sentiments

According to a mill representative, sponge iron prices have strengthened by INR 1,000-1,200/t w-o-w, mainly due to firmer iron ore and coal prices. Meanwhile, tight scrap availability has become a key factor supporting steel prices in the market. Mills are raising billet prices to compensate for higher raw material costs and protect conversion margins. Higher billet prices could encourage merchant billet suppliers to reduce production or increasingly convert billets into finished steel rather than sell them in the market.

On the demand side, rebar trading remains moderate, while mill inventories are currently around 12-15 days. Overall, supply-side constraints and elevated raw material costs are supporting steel prices, although moderate rebar demand could keep the market from seeing a sharp upward movement.

A scrap supplier shared with BigMint that HMS (80:20) scrap prices are currently trading at INR 34,000-35,000/t, depending on payment terms and mill-specific requirements. The supplier noted that reduced bookings of imported scrap and tight domestic availability have resulted in a constrained supply situation, allowing sellers to maintain firmer price expectations.

Meanwhile, prices of alternative metallics have also strengthened, improving the relative pricing environment for domestic scrap. Higher raw material costs are prompting mills to adjust procurement strategies while maintaining focus on conversion economics. With limited imported scrap availability and firm alternative metallic prices providing a cost-based floor, the domestic scrap market remains well supported. Consequently, the scope for any significant downward correction appears limited in the near term.

Outlook

Chennai HMS (80:20) scrap prices are expected to remain firm to slightly higher in the near term, supported by tight domestic availability and limited imported scrap bookings. Firmer sponge iron and billet prices are likely to provide a cost-based floor to scrap prices. Import transactions may remain selective as buyers continue to seek discounts to prevailing offers. Overall, the market outlook remains cautiously positive, with improving finished-steel activity providing additional support.