SteelMint’s India Steel Composite Index declined by 1.5% to 186.7 this week. The major primary steel producers adjusted their list prices this week for both flat and long products. Slow sales momentum in the domestic market, declining market prices along with weak buying sentiments amidst volatility in raw material prices were the major factors behind the price announcements by the mills.
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 192.9 edging down by 0.9% week-on-week. Slow trading activity in both the domestic and overseas markets amidst weak market sentiments continued to weigh on trade prices and export offers.
Mills having adjusted their list prices for flat products showed some signs of relief; however, the trade market prices are still lower as compared to the former. For instance, the mills’ list prices for HRC (IS 2062, 2.5-8mm) are at around INR 76,000-76,500/t ($988-994/t) for early May sales contrasted against the levels of INR 79,000-80,000/t ($1,027-1,040/t) for early-April sales.
The trade market prices of the same stood around INR 72,000-73,000/t/t ($936-949/t), as per SteelMint’s current week assessment. The prices mentioned are on an exy Mumbai basis, exclusive of 18% GST.
Furthermore, SteelMint’s India HRC (SAE1006) export index was assessed at $910/t FOB east cost this week, down by $10/t w-o-w.
Slow demand in the overseas market amidst factors like increased competition, issues around opening of LCs with bank and increased preference for domestic products weighed on the buying interest and volumes.
Moreover, the UAE market had remained mute amidst the Eid holidays since Friday last week, and offers last heard were in the range of $950-980/t CFR. Meanwhile, HRC (S275) offers to the EU declined to $1,100-1,140/t CFR, on limited inquiries.
The long steel index dropped by 2.1% to 180.8 as market demand remained lacklustre for both induction furnace (IF) and blast furnace (BF) route long steel products.
Amongst the major primary steel producers, JSW annouced revised list prices at INR 71,500/t ($929/t) FOR Mumbai for early-May despatches as against INR 73,000-73,500/t ($949-955/t) FOR Mumbai for early-April.
Lower procurement for projects lately amid elevated prices weighed on the sales volumes for both IF and BF-based producers. Moreover, increased power costs and outages due to issues around coal availability alongside volatility in semi-finished product prices remain a matter of concern for producers, and is also weighing on the buying interest from industrial consumers.
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