According to BigMint’s report dated 19 February, 2024, the index for domestic steel scrap (end-cutting) in Mandi Gobindgarh surged by INR 300 per tonne (t), reaching INR 37,400/t on a delivered-at-plant (DAP) basis. Additionally, the local steel market is grappling with a scrap shortage.
In the region, steel ingot prices increased by INR 150/t to reach INR 42,800/t during the reporting and price normalization. Concurrently, prices in various prominent markets also saw an uptick, ranging from INR 50/t to INR 250/t today.
Factors influencing steel scrap prices in Mandi Gobindgarh:
Supply Chain Disruption: The protests and border seal can disrupt the transportation of raw materials and finished products to and from the steel mills. This disruption can lead to delays in production schedules and affect the overall efficiency of operations. Furthermore, with the majority of mills operating round the clock, there has been a surge in demand for local scrap, resulting in a shortage in the market.
Low bookings of imported scrap: Currently, Mandi steel mills and local scrap traders are maintaining silence in response to price disparities in imported scrap, opting instead to focus on procuring domestic scrap.
Raw materials price update
In Mandi, there was an increase in sponge iron (CDRI) prices by INR 200 per tonne, reaching INR 31,200 per tonne. Meanwhile, pig iron (steel grade) prices in Ludhiana remained stable at INR 39,500 per tonne on a delivered-at-plant (DAP) basis.
Imported scrap market
In India, market activities remained limited as buyers continued to prioritize domestic scrap procurement over imports due to significant price disparities. Indicative offers for shredded scrap from Europe were evaluated at $415-420/t CFR Nhava Sheva.
According to a trader, “The Indian market remains subdued for new bookings, with offers from Europe and the US unable to match the pricing competitiveness seen in the Turkish market ($410-415/t) and Pakistani offers ($440-445) for container shipments. Indian mills are hesitant to exceed $405-410 for shredded scrap.”
Another trader commented, “Finding a new inquiry is rare, especially given the lack of support in the steel market.”
Overview of other market
On 19 February, 2024, there was no change in ship-breaking melting scrap prices in Alang, Gujarat, as reported by BigMint. The market saw HMS (80:20) prices holding steady at INR 34,000/t ex-yard. Despite moderate buying inquiries for semi-finished and finished steel in the region during the last trading session, scrap suppliers opted to keep their offers unchanged today.
The steel market in Raipur experienced moderate trading activity, with prices of semi-finished and finished steel showing an increase today. The price of billets rose by INR 100/t to reach INR 39,350/t, while the price of rebar (Fe500) increased by INR 100/t to reach INR 42,800/t ex-works.
Price highlights
End-cutting and billets spread: In Mandi, the end-cutting scrap and billets spread was at INR 5,000-5,500/t.
Domestic Vs imported scrap: Imported melting scrap prices at Nhava Sheva Port were at around $385-$389/t, which equates to approximately INR 34,496/t (including freight),while local scrap-HMS (80:20) prices in Mumbai remained stable at INR 32,500/t d-o-d.
Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stood at INR 12,900/t.
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