Steelmint: India Steel Composite Index inches up as primary mills raise prices

SteelMint’s India Steel Composite Index witnessed a recovery compared with last week, inching up 0.6% to 192.3 this week. Unlike last week, sellers of induction furnace (IF) route long steel products had to reduce prices to boost sales.

On the other hand, blast furnace route (IF) long and flat steel producers kept increasing their list prices on elevated production costs. This led to the trade market prices for flat steel products increasing, keeping the index in the green zone.

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 199.1, rising 2.2% from 194.9 a week ago. Steelmakers continued to raise flat steel prices multiple times this month on the back of higher raw material prices and higher net sales realisation (NSR) from exports in the overseas market.

For instance, most of the private mills are offering HRC at around INR 75,000-76,000/t ($987-1,000/t) and CRC at around INR 82,500-83,000/t ($1,086-1,092/t) at present. In comprison, in end-February, HRC prices were at INR 68,000-68,500/t ($895-901/t) and CRC at INR 73,500-74,000/t ($967-974/t). The prices mentioned are on an ex-Mumbai basis and exclusive of GST at 18%.

Meanwhile, the export offers for HRC (S275, 3mm and above) stood at around $1,365-1,375/t CFR Europe earlier this week, before falling to $1,320-1,330/t on CFR basis for June shipments towards the weekend. Thus, the mill list prices for HRC for domestic sales is still low by about $330/t compared with price indications in the overseas market.

Moreover, the prices in the trade market segment increased across product categories on the anticipation that mills will increase prices in the first week of April.

The long steel index dropped 1% to 185.7 this week as against 187.6 last week. Decline in buying interest at higher prices and falling prices of raw materials such as sponge iron and billets weighed on trade market prices for induction furnace (IF) route long steel products.

However, blast furnace (BF) route producers continued to increase prices on cost pressure due to the steep surge in coking coal prices over the past couple of months.