- Weak semi-finished and finished steel demand curbs scrap buying
- Mandi market softens as mills cut offers; ONGC announces offshore rig auction
Ship-breaking melting scrap prices in Alang declined on 3 July, with HMS (80:20) assessed at INR 33,800/t ex-yard, down INR 400/t day on day. Market activity remained largely inactive as weak demand for semi-finished and finished steel continued to weigh on scrap procurement. Mills restricted purchases to immediate production requirements, resulting in limited trade despite the availability of material.
The weakness in downstream steel demand continued to dictate sentiment across the ship-breaking market, with buyers refraining from building inventories in the absence of any improvement in finished steel offtake.
Downstream steel market remains under pressure
In Gujarat, Bhavnagar billet prices declined by INR 100/t to INR 40,900/t DAP, while rebar prices remained unchanged at INR 46,100/t ex-works. Weak consumption of finished steel discouraged mills from procuring scrap aggressively, keeping buying activity largely hand-to-mouth.
In northern India, Mandi billet prices eased to INR 42,850/t DAP, while rebar prices fell INR 200/t to INR 47,500/t ex-works. HMS melting scrap prices declined by INR 300/t to INR 35,000/t DAP as secondary steel producers reduced both scrap and finished steel offers to clear inventories amid sluggish downstream orders.
Market participants said mills continued to increase sponge iron consumption to sustain production, while limited imported scrap procurement removed a key source of price support for the domestic market despite relatively tighter scrap availability. Regional scrap demand softened as weak offtake of semi-finished and finished steel curtailed mill purchases. Buying remained limited because of production cuts and power outages at several mills, while logistical bottlenecks and labour shortages disrupted supplies in key markets. An ongoing liquidity squeeze further weighed on transactions, leaving overall market activity subdued.
ONGC offers offshore drilling rig for demolition
In the ship recycling segment, state-owned Oil and Natural Gas Corporation (ONGC) has announced the auction of the offshore drilling rig Sagar Vijay. The rig, currently located at Dighi Port, Maharashtra, is being offered for sale under the company’s ongoing asset rationalisation programme and is expected to draw interest from ship recyclers.
Outlook
The Alang ship-breaking scrap market is expected to remain under pressure in the near term. Weak demand for semi-finished and finished steel continues to limit scrap procurement, while mills are expected to maintain need-based purchasing amid subdued steel consumption. Unless downstream demand improves, scrap prices are likely to remain range-bound to weak despite steady material availability.
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