- Stable scrap amid firmer billet and rebar
- Billet prices increased by INR 700/t w-o-w
According to BigMint’s latest assessment, HMS (80:20) scrap prices in Chennai remained unchanged at INR 31,300/t, with no movement recorded on either a d-o-d or w-o-w basis. In the semi-finished segment, billet prices held steady d-o-d at INR 44,000/t, while gaining INR 700/t on a weekly basis. Similarly, rebar prices remained stable on a daily basis but advanced by INR 500/t w-o-w to INR 47,500/t, supported by improved trading activity.
The recovery in billet and rebar prices has improved downstream market sentiment, providing a supportive environment for scrap prices. However, stable scrap prices indicate that mills continue to maintain a cautious and requirement-based procurement approach.
Imported, domestic price trends
According to market participants, Australia-origin shredded scrap was offered at $365-370/t CFR Chennai, while HMS (80:20) was quoted at $330-335/t CFR. Import demand remained subdued, as buyers continued to bid around $15-20/t below prevailing offer levels, resulting in a persistent and wide bid-offer gap.
Market sources noted that domestic scrap remains more economically viable than imported material, even amid relatively tight local availability. Higher import costs and cautious buying sentiment have therefore discouraged mills from making fresh overseas bookings. Consequently, most buyers continue to rely on domestic scrap to fulfil immediate procurement requirements, keeping imported scrap trade activity limited in Chennai.
In the domestic market, HMS (80:20) scrap prices were quoted at INR 31,000-31,500/t for spot deals with immediate payment, while extended credit-term transactions were concluded at INR 31,500-32,000/t. Trading activity remained concentrated within the INR 31,000-32,000/t range, highlighting balanced demand-supply dynamics despite cautious buying sentiment.
Mills continued to adopt a need-based procurement approach, while transaction prices varied depending on payment terms, procurement volumes, and mill-specific requirements. Premiums were observed for deals involving extended credit periods.
Buyer-supplier sentiments
According to a mill representative, sponge iron prices have moved higher on a w-o-w basis, as suppliers from neighbouring states increased their offer levels. However, buyers have shown resistance to the higher prices and are largely following a wait-and-watch approach before committing to fresh purchases. In contrast, billet and rebar prices have recovered weekly, supported by improved trading activity in the finished steel segment over the past few days.
Market sources indicated that rebar inventories at mills remain around 15-20 days. Despite the improvement in trade, the market continues to face mild liquidity constraints, with project-segment transactions reportedly taking place at around INR 2,000/t below retail prices. This price differential continues to weigh on overall market sentiment.
A scrap supplier told BigMint that HMS (80:20) scrap prices are currently ranging between INR 31,000–32,000/t, with transaction values varying according to payment terms and mill-specific requirements. The supplier noted that lower imported scrap bookings, coupled with tight domestic availability, have created supply-side constraints.
However, despite the recent recovery in billet and rebar prices, mills have refrained from increasing their scrap procurement prices. Producers remain focused on controlling production costs and protecting conversion margins, particularly as finished steel demand has improved only moderately. Consequently, mills continue to procure scrap cautiously and largely against immediate requirements, limiting any significant upward movement in domestic scrap prices despite tighter supply.
Outlook
The Chennai scrap market is expected to remain stable to firm in the near term, supported by tight domestic availability and limited imported scrap bookings. Improved billet and rebar prices may provide further support. However, moderate finished steel demand and mills’ focus on cost and margin management are likely to limit significant upside in scrap prices. Overall, HMS (80:20) scrap prices are expected to remain stable to firm, with movements limited to around INR +/- 200-500/t in the coming days.
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