Steelmint: India Steel Composite Index rises as primary mills raise prices further

SteelMint’s India Steel Composite Index rose further by 1.2% to 194.5 this week. Similar to previous week, the blast furnace (BF) route long steel producers continued to increase their list prices for Apr’22 sales much like the flat steel producers. However, the continual decline in prices of  induction furnace (IF) steel products held back the index from rising further.

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 205.9, rising 3.4% from 199.1 a week ago. Steelmakers announced a steep increase in their list prices in the first week of April, following which the trade market prices rose.

For instance, AM/NS India is offering HRC at INR 79,000-79,500/t ($1,041-1,047/t) and CRC at INR 91,000-91,500/t ($1,199-1,205/t). JSW Steel’s HRC prices are at similar levels, while the steel major is offering CRC at INR 86,500-87,000/t ($1,139-1,146/t)

In contrast, HRC and CRC prices in end-March were at NR 75,000-76,000/t ($989-1,001/t) and INR 82,500-83,000/t ($1,087-1,093/t) respectively. The prices are on an ex-Mumbai basis excluding GST at 18%.

On the other hand, the increase in competition in the global trade market weighed on Indian mills’ export offers. Hence, mills are scouting the markets for deals at reduced price levels, with offers at around $1,250-1,300/t CFR Europe and $1,050-1,100/t CFR UAE for June shipments, still higher than domestic prices.

The long steel index dropped further by 1.1% to 183.7 this week as against 185.6 last week. Increased inventories with induction furnace (IF) steel producers along with the decline in buying interest weighed on offers in the trade market segment as well. However, the blast furncace producers continued to increase prices on the steep hike in coking coal prices.