India: BigMint’s scrap index drops by INR 200/t ($2.36/t) amid subdued demand

• Scrap prices drop by INR 2,000/t within ten days
• Alang ship-breaking scrap prices climbed by INR 700/t

BigMint’s domestic end-cutting scrap index fell by INR 200/t to INR 39,000/t DAP in Mandi Gobindgarh market on 21 June, 2024. In the northern steel market, finished steel demand remains weak, and raw material prices continue to fall. Mills in Mandi are purchasing scrap at lower margins, pressuring suppliers. At the same time, buyers are not opting for imported scrap given the recent hike in container shipping expenses. In the region, scrap prices moved down by INR 2,000/t within ten days, posing serious challenges for suppliers.

Raw materials

Sponge iron (CDRI) prices in Mandi dropped by INR 300/t to INR 31,500/t, while steel-grade pig iron prices in Ludhiana stayed steady at INR 40,500/t today. Suppliers responded to sluggish demand from mills by lowering their offers for sponge iron.

Steel market

In Mandi Gobindgarh, the price of steel ingots declined by INR 100/t to INR 44,700/t during the pricing normalisation period. Meanwhile, prices of semis in major markets experienced declines ranging from INR 100 to INR 500/t, with the Jaipur steel market witnessing the most substantial drop of INR 500/t today.

In the region rebar(Fe500) prices decreased by INR 100/t to INR 49,500/t.

Overview of other markets

On 21 June, 2024, Alang’s ship-breaking melting scrap prices rose by INR 700/t ($8/t) d-o-d, reaching INR 38,000/t ($455/t) ex-yard. The market is grappling with a significant scrap shortage, rendering imports unviable. With merely 20-25 ships beached for dismantling, supply limitations and bid-offer discrepancies have enabled suppliers to hike their prices.

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 $390-$395/t, which equates to approximately INR 35,204/t (including freight), while local scrap-HMS (80:20)-prices in Mumbai fell by INR 200/t to INR 34,300/t today. In India, indicative prices of shredded scrap from Europe stood at $415-$420/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 stands at INR 15,400/t.

To see BigMint’s melting scrap assessment, pricing methodology and specification documents, Click here

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