SteelMint: India Steel Composite Index rises as mills raise list prices

SteelMint’s India Steel Composite Index inched up 1%, with the long steel indices on a rise. However, flat steel prices showed mixed movements this week, with the primary steel manufacturers announcing a price hike this week of up to INR 2,000/t for rebar, wire rod and coated flat steel products, which provided a boost to prices.

The index was assessed at 156.4 on 21 Jan’22, up 1% on both a weekly and monthly basis.

The India Steel Composite Index is backed by robust calculation methodologies and is derived from the long steel and flat steel composite indices. The Index serves as a benchmark for end-users, EPC contractors, and manufacturers in the iron and steel industry to settle contracts or understand the market cost of physical supply of commodities such as rebar, wire rod, structurals, HRC, CRC, plates as well as 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.

Flat steel index rises
The flat steel index stood at 165.7, up slightly from 165.5 last week. Although the market sentiments have improved a bit this week, the prices of HRC and plates remain range-bound in key markets.

However, CRC and coated steel products prices increased, although trades activities remained slow despite an increase in enquiries.

An increase in power generation costs given the rise in thermal coal prices, alongside those of coating materials such as zinc and aluminium, led to a rise in the cost of production for coated steel products. This led to the price hike announcement from steel majors for mid-Jan’22 despatches.

The long steel index increased by 2% to 147.4 this week against 145.1 a week back. Unlike the previous week, trades had picked up at the beginning of the week. However, trades declined towards mid-week after most of the producers announced a price hike for BF rebar and wire rod.

An increase in feed material prices such as iron ore, pellets, billets and coking coal provided an upward thrust to both BF and IF product prices.