Steel Scrap Prices Climb ₹1,300 a Tonne in a Week as Power Cuts Hit Chhattisgarh Mills: What It Means for Kabadiwalas and Traders

Steel and scrap prices, 28 September vs 5 October 2026

(Prices per tonne, as reported by an international price reporting agency. Percentage changes are our own calculations.)

A full turnaround in one week

In the week to 28 September 2026, the market was soft. Heavy melting scrap at Mandi Gobindgarh fell ₹600 a tonne and Alang melting scrap fell ₹900, with buyers purchasing only what they needed. One week later, every major ferrous price on the list was higher.

The gain in heavy melting scrap, ₹1,300 a tonne, works out to about ₹1.3 a kg. At Alang, prices touched ₹38,300 a tonne on 29 September before settling at ₹38,000 by 5 October.

Why prices are rising

Power cuts in Chhattisgarh. According to the price report of 5 October, unscheduled power cuts in Chhattisgarh have cut output at several units by up to 35%. Demand for power in the state reached about 6,000 MW in September against a shortfall of 500 to 600 MW, leading to night-time cuts of 7 to 8 hours. The state's mini steel plant association has reported lower output and losses. Chhattisgarh is one of India's largest producers of sponge iron and billets.

Recykal Times analysis: When sponge iron and billet output drops in one of the main producing states, furnaces elsewhere have fewer alternatives to scrap, and finished steel supply tightens. Both push scrap prices up. The power cut figures come from a single report, so how long the effect lasts depends on whether the shortfall continues through October.

Firm markets abroad. A survey of the US scrap market published on 30 September 2026 points to an average price rise of 6.6% in October, after a gain of just 0.3% in September, citing higher demand and tighter supply. Turkey, one of the world's biggest scrap importers, bought 12.73 million tonnes in January to August 2026, up 4.0% from a year earlier.

Recykal Times analysis: Higher global scrap prices make imported scrap costlier for Indian mills, which supports demand for domestic scrap. Combined with tighter import inspection rules introduced in August and September 2026, domestic sellers are in a stronger position than they were a fortnight ago.

The mills are passing the cost through

Recykal Times analysis: At Mandi Gobindgarh, the gap between the price of ingots and the price of heavy melting scrap was ₹9,000 a tonne on both 28 September and 5 October. Ingot makers raised their selling price by exactly as much as scrap rose. That suggests mills can pass on the higher cost for now, which is what keeps them buying. If ingot prices stall while scrap keeps rising, that gap would shrink and buying would likely slow. (Our estimate: ₹47,400 minus ₹38,400, and ₹48,700 minus ₹39,700.)

Recykal Times analysis: Scrap is also gaining on sponge iron, its main substitute. The gap between Mandi heavy melting scrap and Raipur sponge iron widened from ₹9,200 a tonne to ₹9,900 over the week. The two are sold in different regions, so this is only a rough guide, but a wider gap makes sponge iron relatively more attractive for furnaces that can use it. (Our estimate: ₹38,400 minus ₹29,200, and ₹39,700 minus ₹29,800.)

What this means for you

Kabadiwalas and local collectors: Mill prices for heavy scrap are up about ₹1.3 a kg in a week. Your local buyer may not pass on the full increase at once, so check rates with more than one dealer before selling large lots.

Traders and aggregators: The rise is driven partly by a supply shock that could ease if power improves in Chhattisgarh. Selling in steps, instead of holding everything for higher prices, reduces the risk if the market turns.

Induction furnace and mill owners: Your conversion margin has held so far because ingot prices rose with scrap. Watch the ingot to scrap gap each week. A shrinking gap is the first sign that higher scrap prices are hurting.

Ship recyclers at Alang: Melting scrap is back to ₹38,000 a tonne. Firm domestic prices help, but supply still depends on how many ships arrive.

What to watch

1. Power supply in Chhattisgarh: whether night-time cuts continue through October.
2. The ingot to scrap gap at Mandi Gobindgarh: a fall below ₹9,000 a tonne would signal pressure on mills.
3. 8 October 2026: GST Council meeting in New Delhi, where changes to input tax credit and registration rules are expected to be discussed.
4. 16 October 2026: Deadline for feedback on Europe's draft scrap export list.
5. Global prices: whether US and Turkish scrap prices rise as the October survey expects.

The bottom line

Domestic steel scrap prices have rebounded strongly in one week, helped by power cuts that tightened supply and firm prices abroad. Mills are paying more and passing the cost on, which supports the rise for now. Sellers can take advantage of it, but part of the support comes from a supply shock that may not last.