- Scrap shortage forces mills to curb production
- DRI procurement rises amid raw material constraints
BigMint’s domestic end-cutting scrap index, tracking the Mandi Gobindgarh market, remained stable d-o-d at INR 38,600/t DAP on 7 Aug 2026. Prices remained stable due to tight supply and need-based buying. Limited purchasing interest and the absence of strong upward triggers prevented price hikes. Demand remained subdued across both the semi-finished and finished steel segments in Mandi Gobindgarh. Ongoing GST inspections and a shortage of melting scrap continued to disrupt procurement, while mills maintained cautious, need-based buying.
A mill owner informed BigMint, “Due to scrap shortage in Mandi Gobindgarh, 15-20% of major mills are closed, while small mills and the remaining units are looking at production cuts.” Moderate DRI buying from Durgapur and Jharkhand continued, with mills opting for the cost-effective alternative to partially offset lower imported scrap availability and ease raw material shortages.
Raw materials, steel market trends
Sponge iron (CDRI) prices in Mandi declined d-o-d by INR 100/t at INR 29,700/t DAP, while w-o-w, prices increased by INR 200/t amid decent demand. Steel-grade pig iron prices in Ludhiana remained stable d-o-d at INR 42,600/t DAP and up by INR 600/t w-o-w.
In the steel segment, Ingot prices in Mandi Gobindgarh remained largely stable d-o-d at INR 42,500/t DAP, while prices were up INR 270/t w-o-w. Rebar (Fe500) prices in Mandi Gobindgarh remained stable d-o-d at INR 47,200/t ex-works, while prices were up INR 260/t w-o-w.
Overview of Alang market
HMS (80:20) remained stable d-o-d at INR 33,300/t ex-yard, but declined INR 520/t w-o-w. The market remained largely range-bound during the week, with HMS (80:20) trading within INR 32,500-33,300/t. Initial support from improved rolling mill procurement was offset by weak downstream steel demand and pressure on finished steel prices. Despite monsoon-related supply constraints limiting scrap availability, buying remained need-based, leading to the weekly decline.
Upcoming scrap auctions
Price highlights
End-cutting to billet spread: In Mandi, the spread between end-cutting scrap and billets stood in the range of INR 3,900-4,100/t.
Domestic vs imported scrap: Imported melting scrap prices at Nhava Sheva Port were assessed at $330/t, approximately INR 33,700/t (inclusive of freight). HMS (80:20) prices in Mumbai remained largely stable day-on-day at INR 32,800/t DAP. Indicative prices of shredded from Europe stood at $390/t CFR Nhava Sheva.
Raipur sponge iron-billet spread: The conversion spread (margin) between pellet-based DRI (P-DRI) and steel billets in Raipur stood at INR 13,050/t.
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