Steelmint: India Steel Composite Index stays flat despite rise in long steel prices

SteelMint’s India Steel Composite Index remains unchanged, with a decline of 1% witnessed this week in the flat steel composite index which, however, has been balanced by a 2% rise in the long steel composite index.

The India Steel Composite Index is backed by robust calculation methodologies and is derived from the long steel and flat steel composite indices. The Index serves as a benchmark for end-users, EPC contractors, and manufacturers in the iron and steel industry to settle contracts or understand the market cost of physical supply of commodities such as rebar, wire rod, structurals, HRC, CRC, plates as well as galvanised plates.

• The Composite Index is assessed on a weekly basis: every Friday at 18:30 IST, as per the weighted average prices based on manufacturing capacity and production.
• SteelMint considers the Composite Index with the base year being 3 Jan’20 (financial year 2019-2020) and the base value as 100.
• The Composite Index doesn’t give the absolute price.
• The Indian steel industry is broadly classified into the BF-BOF and the electric/induction furnace routes. Keeping this broad classification in view, SteelMint proposes to release the Composite Index by considering both production routes by manufacturing capacity and the production weighted method to compute the index for India. For details click to view the methodology document.

India Steel Composite Index stands unchanged

The index was assessed at 156 on 31 Dec’21, unchanged on the week, but down 3% on the month.

Slow demand both in the domestic trade segment and the overseas markets has raised concerns over increasing stockpiles. Meanwhile, the fear of a further decline in prices in the trade segment as well as from the mills in Jan continues to weigh on market sentiments affecting buying patterns of end-users as well as distributors.

The domestic trade reference prices of hot-rolled coils (HRCs) have dropped by 8% on a monthly basis to INR 65,400/tonnes (t) ($878/t) exy-Mumbai in Dec’21 against INR 70,900/t ($952/t) exy-Mumbai a month ago.

Further, domestic buyers of finished flat steel products are concerned over the decline in global flat steel prices. For instance, the SteelMint India HRC (SAE1006) export index fell sharply by $190/t (INR 14,152/t) to $725/t (INR 54,003/t) FOB east coast in end-Dec from $915/t ($68,155/t) FOB at the beginning of Aug.

At the same time, China HRC (SS400) export offers have dropped a whopping $255/t (INR 18,994/t) to $765/t (INR 56,982/t) FOB against 1,020/t (INR 75,976/t)FOB.

On the other hand, the long steel composite index witnessed a growth of 2% on the week, while inching up 1% on a monthly basis. An increase in prices of feedstock such as billets and sponge iron boosted prices in both the integrated and electric/induction furnace steel markets. However, demand for finished long products grew moderately this week.