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SteelMint: India's domestic steel scrap index up by INR 300/t on inadequate supply

SteelMint’s domestic steel scrap (end-cutting) index moved up by INR 300/tonne (t) to INR 41,500/t DAP Mandi Gobindgarh. Prime factors supporting this marginal hi...

Melting Scrap
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1 Nov 2021, 17:37 IST
SteelMint: India's domestic steel scrap index up by INR 300/t on inadequate supply

SteelMint's domestic steel scrap (end-cutting) index moved up by INR 300/tonne (t) to INR 41,500/t DAP Mandi Gobindgarh.

Prime factors supporting this marginal hike were the slight price improvement in substitute raw material (sponge iron) which pushed up prices of semi-finished amidst tight scrap supply.

In addition, a few scrap sellers held their offers as they are anticipating that the market would be on the positive side which would allow them to get more profit during trade as per the conversion spread.

However, some trade participants said that the current prevailing sponge iron prices are much higher in terms of recovering metal value when compared to melting scrap, although a right mixture is needed to maintain the chemical composition of the product.

Further, scrap arrival is getting weaker on d-o-d basis leading to a simultaneous correction in the conversion spread.

Meanwhile, a few small standalone furnaces are only utilizing their inventory (scrap) and not procuring in the same ratio as per their consumption requirements due to cost concerns which may lead to production cuts in the short run.

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 Sheet cutting prices traded in the region.

Scrap Grade and Spread Calculation: (Mandi Gobindgarh)

Prices in INR/t, DAP (Delivered at Plant)

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

What is SteelMint Indian scrap index - SteelMint's assessment of Mandi scrap reflects the prices of different melting HMS grade generated and traded in the domestic market. SteelMint gathers and verifies information from buyers and sellers active in the physical spot market. The data obtained by SteelMint, are normalized for yield, dimensions, density, location and other terms of trade to the specifications.

Why this index? India's National Steel Recycling policy mentioned that the efficient use of scrap for steel production becomes very crucial for India as 35-40% share has been envisaged from scrap-based steel production in the journey of 300 mn t pa by 2030. This shall increase the requirement of steel scrap sharply from the present level of around 30 mn t.

Methodology - Market data, including deals, bids, and offers that meet the delivery and quality criteria are considered for price assessments. The highest importance in the price calculation process is assigned to confirmed deals (T1) where either a buyer or seller has provided details of the transaction. Deals of only reputed and trustworthy producers and trading firms are included in the price collection and calculation process. Indicative prices, confirmed bids and offers are also considered valuable for the pricing process (T2). The index has been calculated using an average of T1 and T2 price inputs.

To provide feedback on this index or if you would like to contribute by becoming a data partner, please contact - info@steelmint.com.

 

1 Nov 2021, 17:37 IST

 

 

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