SteelMint: Billet index rises slightly on improved bids, steel demand recovery – 7 Sep

SteelMint’s daily steel billet index was assessed at INR 47,250/tonne (t) (+ INR 100/t) exw-Raipur on 7 September, 2022.

About 4,300 t of transactions were recorded today as against 1,900 t on 6 September.

The index recovered on improved bids following a price rally in the northern region. Thus spot demand for finished steel products also gained, resulting in a rise in spot trade volumes of billet in Raipur.

With the rise in billet prices and decline in sponge iron prices, margins of standalone billet producers increased. The conversion spread (margins) from sponge PDRI to billet in Raipur increased by INR 400/t, d-o-d, to INR 14,900/t.

SteelMint’s daily price assessment for wire rods rose by INR 200/t and for rebar by INR 100/t, while sponge iron offers fell by INR 200/t in Raipur today.

About 6,500 t of transactions in wire rod were recorded today as against 1,100 t yesterday. Also, rebar trade volumes increased to around 4,600 t today as against 1,400 t yesterday in Raipur.

Rationale –

This index has been derived based on transactions, offers, bids and indicative price data sets. Transactions are considered as 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) – Six trades at INR 47,000-47,300/t were recorded during the 2:30 pm to 5:30 pm SteelMint trading window and considered for final price calculation as T1 inputs. The average of these transactions was INR 47,220/t which is given a 50% weightage in the final price calculation. Apart from this two trades of INR 46,900 & INR 47,100 recorded at 12:25 pm & 2:23 pm was excluded due to timing.

• Other Price Indicators – bids/offers/indicative (T2) – Ten offers reported in the trading window and considered as T2 inputs. The average price of these ten was INR 47,265/t and given a 50% weightage in the final price calculation.

The final price for billet exw Raipur was at INR 47,243/t, rounded to INR 47,250/t exw.

Click for detailed methodology

T1 – Trade, T2 – Offer/Bid/Indicative, *Normalized price as per methodology