Ferrous scrap prices in India have hit a 10-year high, not just due to prevailing positive sentiments in the semis and finished steel markets after the gradual lifting of COVID-related regional lockdowns in Q1 FY'22. Other factors driving the rally in the domestic scrap market are the fast-rising prices of substitutes such as sponge iron and tightness in scrap availability, SteelMint notes. Importantly, the ongoing coal crisis and resultant rally in seaborne prices have triggered the rally in domestic sponge iron prices, while power shortage in the country threatens to impact production at different levels.
Prices on a roll
SteelMint assessed melting scrap (end cutting material) prices at INR 42,200/tonne (t) DAP Mandi Gobindgarh on 16 Oct'21 - an increase of INR 4,800/t month-on-month.
One reason why domestic scrap prices have risen surprisingly fast is the rally in the sponge iron market. Scrap and sponge iron are