OfBusiness MS Scrap Dailies

8th May’23

Price

• Prices of MS Scrap have reduced by Rs. 500-1,000/ton across categories, with a continued fall in May after a steep drop in April. Prices for Godown are Rs. 34.50/kg, Bazaar Rs. 33.50/kg, Commercial Rs. 32.50/kg, Boring Rs. 33.50/kg, Godown heavy Rs. 35.50/kg and Super Rs. 36.00/kg in Chennai.

Demand and Supply

• With a dip in demand for finished goods such as TMT and structural products, the same sentiment is being passed on to the MS Scrap industry. Recent GST raids in several Steel manufacturing units and Scrap suppliers created supply constraints locally, but the current demand dip of finished goods has overcome that situation and the market is driven by the demand factor.

News

• Possible solutions for GST issue which Government might consider:
  • Reduction of GST of Scrap to 5% from 18%
  • Following Reverse Charge Mechanism (RCM)

• Steel Scrap Futures (SSCc1) London:
  • May 01, 2022 – $528.22/ton
  • May 02, 2023 – $389/ton
  • May 05, 2023 – $373/ton

• There has been a significant dip in Steel Scrap futures over a year. In the first five days of May, there has been a price reduction of $16/ton (~Rs. 1,300/ton) which shows.

OFB’s Opinion

• The price sentiments of Scraps are driven by the demand factor of Steel Finished goods, which seems to have remained moderate. There is a significant decline in Scrap prices globally. The market is adopting a wait-and-see approach. We will have to see how global markets will face today once it opens.