India: Alang’s scrap prices rise INR 1,500/t d-o-d on firmer steel prices

• Firmer billet and rebar prices supported scrap sentiment
• Mills remained cautious on fresh buying

Alang’s ship-breaking melting scrap prices for HMS 80:20 increased by INR 1,500/t day-on-day (d-o-d) to INR 38,500/t ($401/t) ex-yard on 29 September. The steep one-day increase reflected a combination of firmer semi-finished and finished steel prices, higher raw material replacement costs and tighter near-term material availability.

Market sentiment among suppliers strengthened as billet and rebar prices moved sharply higher across key consuming centres. Higher coal costs and firmer prices of other metallic inputs have also raised mills’ replacement costs, supporting higher scrap offers. Heavy rainfall in the region on 28 September further disrupted movement and market activity, contributing to tighter availability.

The sharp increase, however, does not necessarily indicate an equivalent improvement in underlying scrap demand. Buyers remained cautious about accepting the higher offers, particularly after the abrupt move, with procurement largely linked to immediate requirements. The widening gap between supplier offers and mill bids could limit further price gains unless finished-steel demand and mill buying strengthen.

Gujarat market update

In Gujarat, Bhavnagar billet prices increased by INR 1,000/t d-o-d to INR 47,200/t DAP on 28 September, while Ahmedabad rebar prices rose by INR 900/t to INR 52,100/t ex-works.

The sharp increase in finished and semi-finished steel values improved replacement-cost sentiment and encouraged suppliers to hold firmer on scrap offers. Market participants reported stronger price expectations across the raw material chain, with sellers becoming less willing to negotiate at earlier levels.

However, the rapid rise in steel prices has not yet translated into proportionately stronger end-user demand. Mills are therefore likely to remain selective in procurement, particularly at higher scrap replacement costs. Any slowdown in finished-steel buying could put pressure on the current upward momentum.

Mandi market update

In Mandi Gobindgarh, billet prices increased by INR 1,000/t d-o-d to INR 48,000/t DAP, while HMS melting scrap prices rose by the same amount to INR 39,000/t DAP. Rebar prices increased by INR 1,100/t d-o-d to INR 53,200/t ex-works.

The increase was supported by lower market arrivals as suppliers held back material amid stronger price expectations. Sellers were more reluctant to release material at previous levels, while mills faced higher replacement costs across scrap and other metallic inputs.

Despite the sharp rise, buying remained largely need-based. A mill owner told BigMint that mills were maintaining adequate inventory levels and continued to prefer immediate procurement, reflecting caution over the sustainability of the current price rally.

Outlook

The Indian scrap market has developed a strong upward bias, driven by higher metallic input costs, tighter arrivals and a sharp rise in semi-finished and finished steel prices. However, the unusually large one-day move in Alang highlights the potential for volatility. Sustained gains will depend on whether stronger finished-steel demand translates into higher mill scrap consumption rather than being driven mainly by supplier expectations and limited availability.