Domestic ferrous scrap prices in Mandi Gobindgarh and Mumbai continued to climb through this week.
The daily Davis Index for HMS 1&2 (80:20) rose by Rs100/mt ($1.35/mt) to Rs23,600/mt ($319.25/mt) del Mandi Gobindgarh. The index for Sponge iron rose by Rs50/mt to Rs23,350/mt del Mandi Gobindgarh. Despite the low demand for finished steel, scrap prices rose on a supply crunch. Suppliers also raised offers citing bullish imported scrap prices and international market.
The daily Davis Index for HMS 1&2 (80:20) rose by Rs650/mt to Rs23,950/mt delivered mill, while the index for Sponge iron increased by Rs300/mt to Rs21,800/mt delivered mill. The wet season has dampened collected ferrous scrap, which mills suggest is unviable for their furnaces. Thus, supply remains scarce, which has supported prices. Similarly, iron ore mining is known to stay hampered during the monsoons, which has increased the input costs for Sponge iron manufacturers.
The rise in raw material cost has also had a bearing on semi-finished and finished steel prices in the past few days. But at the increased levels, demand remains a challenge for most mills. Traders expect prices to remain range-bound until the Diwali festival ends in mid-November.