Maruti Suzuki India Limited’s (MSIL’s) CR-busheling scrap prices hit a one-year low in its latest auction. India’s largest vehicle manufacturer held an auction for 3,700-4,000 tonnes (t) of CR busheling prompt scrap (low manganese) from its Gurgaon facility on 24 November 2022. According to the latest update, the entire quantity was booked at INR 43,300/t ex-works (exw), down approximately by INR 4,300/t compared to the previous month’s auction price. These prices are at a one-year low.
It may be mentioned that MSIL’s auctions are a benchmark and price discovery mechanism for other auto manufacturers’ scrap auctions across the country. These auctions typically comprise clean industrial sheet steel scrap, clippings, stampings, punchings, or skeleton scrap that may include black, galvanized and zinc-coated materials. The material is primarily procured by foundries.
Other auto scrap auctions
Automotive Stampings and Assemblies Ltd (ASAL) held an auction for CR-HR coated mix busheling scrap from its Pune (Maharashtra) and Panthnagar (Uttarakhand) plants on 23 November, 2022. As per sources, 1,000 t of the material was booked at INR 44,350/t exw from Panthnagar. However, 1,200 t of similar material from the Pune facility remained unsold, as these received no bids.
Mahindra & Mahindra Limited (M&M)-OEM, meanwhile conducted auctions on 24 November for around 2,300 t of coated and non-coated press shop punching scrap from locations in Pune and Nashik, in the state of Maharashtra. JBM Auto booked 1,800 t of material from the Pune-based unit’s auction at INR 34,000/t exw. Around 500 t of the same grade material from the Nashik plant was sold at INR 35,600/t exw.
Ashok Leyland Limited’s Pantnagar plant also held an auction on 25 November for about 800 t of CR-HR punching scrap in which around 150 t received bids at INR 38,600/t and 650 t HR-CR process scrap at INR 41,900/t exw, as per sources.
Why are auto scrap prices falling?
Finished, sponge prices correct downward: November saw price corrections across the board in the steel industry. For instance, finished steel and sponge iron prices corrected, leading to a drop in the prices of scrap too. In fact, the domestic scrap market has never been as bleak in the last one year as it is now. It has been almost one year since the last peak, and prices are continuing to decrease due to the low demand from steel companies. The global economic situation remains uncertain, and continues to put downward pressure on scrap market prices too.
Record bulk scrap entry pressures domestic prices: A huge amount of bulk scrap, in fact, a record 400,000 t, has entered India in November. Most of this cargo had been booked around July-August and were slated to be delivered in the current month and this scenario has pressured down domestic scrap prices, a trend that has percolated down to the auctions too.
Export duty removal fails to lift steel market: The steel export duty removal failed to lift steel market sentiments. Demand for finished steel remained lacklustre and this too impacted domestic and auctioned scrap prices.
Steel and thus scrap prices may not head up north immediately from here.
Steel-makers slow down procurement: Indian primary and secondary steelmakers were showing an increased interest in domestic auto scrap as well as imports. However, as demand for finished steel is declining, steel producers too went on the backfoot.
Major m-o-m corrections – HMS vs CR-busheling scrap
SteelMint’s region-wise CR-busheling prices for last six months
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