SteelMint: India Steel Composite Index rises, mills to increase prices for March

SteelMint’s India Steel Composite Index rose 1.4% to 166.6 this week. Increase in raw material prices amidst the ongoing Russia-Ukraine war resulted in mills increasing prices this week. Further, market particpants are of the view that mills are likely to increase their list prices by a good margin for early March sales. This has pushed a few flat steel indices higher along with those of long steel.

The Index is backed by robust calculation methodologies 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 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.

The flat steel index stood at 172.4, up marginally from 172.3 a week ago. An increase in prices of cold-rolled coils (CRC) and a spurt in galvanised steel products amidst supply constraints pulled the index upwards. However, prices of hot-rolled (HR) plates remained range-bound while those of HRC fell marginally, as demand continued to remain weak despite a shortage of these products in the market.

Market participants are expecting mills to increase flat steel prices by INR 1,000-2,000/t for the early March sales backed by good export order books and rally in raw material prices such as coal.

The long steel index rose by 2.9% to 161.1 this week as against 156.6 a week back. Improved demand led to a spurt in the prices of long steel products.

Meanwhile, shortage of a few grades and elevated prices of sponge iron and billets also provided support to prices of both induction furnace (IF) and blast furnace (BF) route long steel products.