- Mandi steel mills face challenges due to continuous price drop
- Mumbai market witnessed need based buying in finished steel
BigMint’s domestic end-cutting scrap index fell by INR 700/t to INR 37,700/t DAP in the Mandi Gobindgarh market on 25 June, 2024.
A scrap supplier informed: ”Due to sluggish demand in the semi-finished and finished steel markets, Mandi Gobindgarh scrap prices continue to decline as steel mills procure scrap at lower levels. Additionally, scrap suppliers are holding onto their material and not selling at these reduced prices.”
“Facing daily price drops, steel mills are struggling due to the absence of buyers and the lack of significant infrastructure projects. The current supply of raw materials is also higher than the present demand. Nevertheless, this is expected to be the final stage of the decline. We foresee a rise in demand and prices in the near future. Additionally, the global market is currently underperforming,” a steel maker informed BigMint.
Raw materials
Sponge iron (CDRI) prices saw a healthy drop in Mandi by INR 700/t to INR 30,500/t, while steel-grade pig iron prices in Ludhiana fell by INR 100/t to INR 39,900/t today.
Steel market
Steel ingot prices in Mandi Gobindgarh dropped by INR 600/t to INR 44,000/t during the price normalisation period. Concurrently, semi-finished steel prices in major markets experienced declines of INR 300 to INR 900/t, with Raigarh witnessing the most substantial decrease of INR 900/t.
The region saw rebar (Fe500) prices decrease by INR 600/t to INR 48,400/t. M-o-m, prices fell by INR 2,900/t, primarily due to reduced buying activity.
Overview of other markets
Mumbai’s IF route rebar (Fe 500) prices remained stable d-o-d at INR 48,900/t exw. Due to an unclear market trend, buyers are restricting themselves from bulk bookings. Hence, the market has only seen need-based buying activity in finished steel. However scrap (HMS 80:20) prices stood at INR 34,000/t DAP. Conversion spread from scrap to billet hovering at INR 8,300/t.
Price highlights
End-cutting and billets spread: In Mandi, the end-cutting scrap and billets spread was at INR 5,600-5,700/t.
Domestic vs imported scrap: Imported melting scrap prices at Nhava Sheva Port were at around $388-$390/t, which equates to approximately INR 34,737/t (including freight), while local scrap-HMS (80:20)-prices in Mumbai remained stable at INR 34,000/t. In India, indicative prices of shredded scrap from Europe stood at $410-$415/t CFR Nhava Sheva.
Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stood at INR 14,550/t.
To see BigMint’s melting scrap assessment, pricing methodology and specification documents, Click here
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