SteelMint’s India Steel Composite Index declined by 0.6% to 191.8 this week. The weak performance of the flat steel indices continued to weigh on the index. However, the long steel indices, moving in the green zone despite a decline in trade activities this week, helped ease some of the pressure exerted by flat steel.
The index is backed by robust calculation methods 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 for settling contracts or understand the market cost of physical supply of commodities such as rebar, wire rods, structurals, HRCs, CRCs, plates and 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 197.7, dipping 1.9% from previous week’s 201.5. The slowing of trades in both domestic and overseas markets weighed on trade market prices across product categories.
The decline in performance indicators such as IIP (Index of Industrial Production) and manufacturing Purchasing Managers Index (PMI) relayed the weak performance in Mar. Moreover, slowing down of activities in the construction and infrastructure segments and its impact on the allied industries such as original equipment manufacturers (OEM), heavy engineering and fabrication weighed on demand for flat steel products across categories.
A consortium of developers/contractors in north India registered their protest against the steep rise in prices of steel and raw materials earlier this month.
Furthermore, buying sentiments have been hit by the weakening of export realisations over the past couple of weeks. HRC (S275) export offers to the EU have edged down to $1,130-1,150/t CFR, as buying interest was impacted by concerns around opening of credit lines with banks. Meanwhile, export offers for HRC (SAE1006) to the UAE dropped to $980-1,000/t CFR levels this week from $1,050-1,100/t CFR at the beginning of the previous week.
The long steel index remained in the green zone, edging up by 0.8% to 186.1 as against 184.7 last week. Improved buying activities during the previous week pushed the market prices of induction furnace (IF) long steel products higher on Monday. However, prices remained mostly firm throughout the week before inching down towards the weekend, as buyers retreated to the sidelines due to elevated prices.
Meanwhile, buying interest continued to remain slow for blast funace (BF) route long steel products because of higher prices and a sizeable volume of procurements witnessed over the past few weeks.
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