SteelMint: India Steel Composite Index rises on surging long steel prices

SteelMint’s India Steel Composite Index inched up to 164.3 this week. The rise in the long steel indices on the back of growing trade activities and increase in prices was moderated a bit due to the marginal rise in flat steel prices.

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 172.3, up marginally from 172.2 a week ago. Anticipation of a second round of increase to be announced by the mills kept demand moderate. The procurement cycle of end-users are still restrained for hot-rolled flat products, as buyers continue to stick to need-based purchases impacting the trade volumes and the price momentum. 

However, in the cold-rolled and other value-added products the prices showed some increase on prospects of demand recovery from the automotive and white good segments in the near term.

Another major factor lending some support to market prices was limited supplies in the domestic market amid robust export bookings of hot-rolled coils by mills. Export bookings of some 1.14 mn t of HRC has been estimated for Feb-Mar’22 deliveries tightening up the supplies from mills. Furthermore, a few deals were reported this week for Turkey and Nepal for April deliveries.

The long steel index rose to 156.6 this week against 155 a week back. The trade market saw surge in activity and prices rose higher compared to flat steel products for both blast furnace (BF) and induction furnace (IF) route products.

“Demand has been healthy from major projects lately and the retail market also performed well this week. Also, mills hold a fair quantity in order books till mid-March which might restrict supplies in the near term,” shared sources.