India: BigMint's billet index drops by INR 250/t amid weak demand - 25 Aug

Lower offers fail to revive buying interest
Finished steel prices drop INR 300/t d-o-d

The Indian billet market witnessed a downturn on 25 August, with BigMint’s index dropping INR 250/tonne (t) d-o-d to INR 37,050/t exw-Raipur. Despite lower offers, procurement remained sluggish, as buyers continued to hold back, placing bids at lower levels in anticipation of further price corrections.

Market highlights

Overview: Market activity stayed largely inactive, with only need-based bookings getting concluded. A lack of buyer participation weighed on both semi-finished and finished steel demand. Participants refrained from bulk procurement, citing weak finished steel demand and expectations of additional price corrections.
Finished steel prices: Rebar and wire rod prices both fell by INR 300/t d-o-d, reflecting sustained pressure from limited end-user demand.
Sponge iron: Prices fell by INR 250/t d-o-d, with modest buying interest seen only at lower offer levels.

The conversion spread (PDRI to billet) for standalone induction furnaces in Raipur was assessed at INR 13,650/t, indicating continued cost pressure on billet producers in the absence of finished steel support.

Rationale

This index is derived based on transactions, offers, bids, and indicative price data sets. Transactions are considered T1 and given a weightage of 50%, whereas other data sets are considered as T2 and given a weightage of the balance 50%.

Transactions (T1) – Three trades at INR 36,900-37,100/t were recorded during the 2:30 pm to 5:30 pm BigMint trading window and considered for final price calculation as T1 inputs. The average of these transactions was INR 36,958/t, which was given a 50% weightage in the final price calculation.
Other price indicators – bids/offers/indicatives (T2) – Fourteen offers were reported in the trading window and considered as T2 inputs. The average price of these fourteen was INR 37,170/t and given a 50% weightage in the final price calculation.

The final price of billets was INR 37,064/t exw-Raipur, rounded off to INR 37,050/t exw.

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