On 20 February, 2024, according to BigMint’s report, the index for domestic steel scrap (end-cutting) in Mandi Gobindgarh increased by INR 200 per tonne (t), reaching INR 37,600/t on a delivered-at-plant (DAP) basis. This surge is attributed to active trading and a scarcity of domestic scrap, resulting in a weekly increase of INR 1,300/t in end-cutting scrap prices.
Steel market
In Mandi, steel ingot prices rose by INR 100/t, reaching INR 43,000/t during reporting and price normalisation. Similarly, prices in various significant markets also witnessed an increase, ranging from INR 100/t to INR 400/t today. Rebar (Fe500) prices saw a rise of INR 300/t, reaching INR 47,300/t, supported by robust trade activity.
A Mandi steel maker informed BigMint: “In recent days, there has been an uptick in trade activity, signalling a departure from the subdued market conditions experienced over the past few months. However, major steel manufacturers are still grappling with significant challenges. The root cause lies in the limited supply of scrap materials in the region. The ongoing farmer protests and the sealed Punjab border have disrupted the regular flow of arrivals and dispatches, causing disruptions in the local supply chain.”
Most large mills are relying on their existing inventory of raw materials, including scrap and sponge iron, despite experiencing shortages of steel scrap and price disparities in the Mandi market.
Raw materials price update
In Mandi, the price of sponge iron (CDRI) held steady at INR 31,200/t, while pig iron (steel grade) prices in Ludhiana remained unchanged at INR 39,500/t on a delivered-at-plant (DAP) basis.
About imported scrap market
In India, imported scrap buyers were cautious due to cost-effective alternatives available in the domestic market and sluggish domestic steel sales. Shredded scrap from Europe was offered at $415-420/t. Buyers aim for shredded scrap at $400-$405/t CFR and HMS at $380-$385/t CFR.
A representative from a trading company commented, “India’s market is quiet due to multiple reasons. Local scrap is available at a lower price, and for suppliers the price of scrap in their respective market is more attractive compared to exports. Additionally, there is very poor sales of finished goods.”
Overview of other markets
According to BigMint’s evaluation on 20 February, 2024, ship-breaking melting scrap prices in Gujarat’s Alang market edged up by INR 200/t d-o-d. The assessed price for HMS (80:20) reached INR 34,200/t ex-yard. A surge in trade activity and pricing trends for semi-finished and finished steel noticed in the later hours of the previous trading session, along with heightened demand for scrap, prompted suppliers to raise their offers today.
Mumbai: Prices for Rebar (Fe 500) on the Mumbai IF route stayed constant day over day at INR 48,200/t exw. Good trade activity was seen in the market for finished steel. Additionally, the cost of a billet has gone up by INR 100/t d-o-d to INR 43,100/t DAP. Scrap dealers have raised their offer prices in response to the market’s strong demand for finished steel, which has been evident since last week. The current pricing of scrap (HMS 80:20) is INR 33,000/t DAP. Conversion Spread between scrap and billet is around INR 10,100/t.
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 $388-$393/t, which equates to approximately INR 34,819/t (including freight),while local scrap-HMS (80:20) prices in Mumbai climbed by INR 500/t to INR 33,000/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.
To see BigMint’s melting scrap assessment, pricing methodology and specification documents, Click here
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