SteelMint: India Steel Composite Index stays flat; trade momentum slows

SteelMint’s India Steel Composite Index stands unchanged at 163.4 this week after rising for four weeks at a stretch. The decline in the long steel index nullified the marginal gains seen in the flat steel index. This comes on the back of rising price levels weighing on trade volumes of both long and flat steel products.

Major primary steel producers further increased their list prices for both the long and flat steel segments for Feb’22 earlier this week after which demand started cooling down.

The Index is backed by robust calculation methodologies and is derived from the long steel and flat steel composite indices. It 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.

The flat steel index stood at 172.2, up marginally from 171.7 a week ago. AM/NS India announced a second round of price hike of INR 500/t ($7/t) for HRCs and INR 1,000/t ($13/t) for plates earlier this week. Other major producers are likely to announce a hike in prices after having raised prices by INR 1,000-2,000/t ($13-26/t) in the previous week.

Key factors driving these hikes are elevated prices of raw materials, robust export bookings and rise in global flat steel prices.

The long steel index inched down to 155 this week against 155.5 last week. The decline in prices of raw materials such as sponge iron and billets weighed on buying interest. This, in turn pushed the prices of induction furnace (IF) route long products downwards. Blast furnace (BF) route long products also witnessed a slowdown in trades after a couple of steel majors raised rebar prices further by INR 1,500-2,000/t ($20-26/t) earlier this week.