India’s domestic steel scrap index almost stable on tight availability

SteelMint’s domestic steel scrap (end-cutting) index remained almost stable at INR 42,000/tonne (t) DAP Mandi Gobindgarh on 7June 2022.

Semi-finished steel prices witnessed a slight correction in today’s trading session. However, the trend did not reflect in melting scrap prices. Scrap prices remained supported on the back of supply shortage in the spot market due to regular administrative checkings.

However, a few sellers said that scrap availability has been improving bit by bit.

Key highlights:

• Spread between end-cutting and Ingot – In general, the end-cutting scrap to ingot spread is around INR 5,000-5,500/t. However, due to the current shortage of material, there is a gap of around INR 6,500-7,000/t DAP Mandi.
• Domestic vs imported scrap – Since imported scrap prices are higher by INR 1,500-2,000/t, domestic buyers are currently buying scrap from the local markets. Currently, imported scrap is available at $475/t CNF Nhava Sheva and at $468/t in Chennai. Imports will be viable for buyers if prices fell by around $10-15/t.
• Raipur sponge vs billet – The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billet in Raipur is hovering around INR 14,000/t.

Market participants apprehend that prices will remain under pressure on account of declining pellet and iron ore prices and with the impending onset of monsoon in India, which generally slows down construction activity.

Today, 13 sets of trades, indicative prices/bids/offers were recorded in the publishing window.

The Index also derives the HMS 80:20 scrap (Heavy, Med), and CR busheling scrap prices traded in the region.

SteelMint’s price assessment (Region wise)

To see SteelMint’s Melting Scrap Assessment, pricing methodology and specification documents, Click here

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