BigMint’s data for 4 April, 2024 revealed a rise of INR 700/t in the domestic steel scrap index (end-cutting) in Mandi Gobindgarh, reaching INR 39,700/t on a delivered-at-plant (DAP) basis. The market is experiencing a shortage of scrap, yet buyers are hesitant to purchase imported scrap given the current situation.
Steel market
Steel ingot prices surged by INR 700/t to reach INR 45,200/t DAP during the price normalisation phase. Conversely, prices in several other markets saw an uptick, ranging from INR 100/t to INR 700/t. Additionally, rebar (Fe500) prices increased by INR 600/t to INR 49,600/t ex-work with improved demand.
The Mandi Gobindgarh steel market is facing a shortage of scrap due to limited supply from neighbouring states. This has been further impacted by stricter inspections by special investigation teams. However, there are signs of a pick-up in demand as some mill owners reported increased buying activity recently, following a muted March. There were also price disparities between scrap buyers and sellers observed in the Mandi market.
About alternative raw material
Mandi steel mills are grappling with a shortage of domestic steel scrap, leading them to resort to procuring sponge iron for steelmaking, with a composition of around 80% scrap and 20% sponge iron. Consequently, there has been an increase in demand and price for sponge iron(CDRI), with prices rising by INR 500/t to reach INR 33,000/t DAP.
Imported scrap market
Today, India’s imported scrap market exhibited stability as buyers took a cautious approach amidst a sudden surge in domestic scrap prices, opting to observe the price dynamics further. Additionally, feedback from the market suggests that some suppliers refrained from making offers in anticipation of a potential price escalation.
Indicative offers for shredded scrap originating from the US and Europe were assessed within the range of $415-$425/t CFR, with no transactions reported for the day. Concurrently, offers for HMS (80:20) from West Africa and Europe stood at $385-$395/t CFR.
A representative from a rolling steel mill based in northern India remarked, “There’s a scarcity of scrap in the market leading to price hikes, albeit temporarily. While there’s a slight uptick in demand for imports, sellers are now cautious and not actively offering due to the observed dynamics in the domestic market.” Another official from a steel mill added, “The domestic market has seen a rise of INR 3,000/t, but our sales have declined. We haven’t made any sales in the past week, which appears to be a temporary trend. With elections approaching and strict enforcement of cash flow regulations, the market sentiment seems subdued.”
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