SteelMint’s daily sponge iron, CDRI, index is assessed at INR 35,800/tonne (t) (- INR 100) exw Rourkela on 11 May’22.
About 2,500 t of transactions in CDRI were recorded by SteelMint today as against 2,300 t on 10 May.
The index fell close to a three-month low as similar price levels had been recorded during the middle of February, 2022. Prices are falling continuously as bids remain lower by around INR 300-500/t compared to offers floated by the suppliers.
Moreover, the uncertain price movement remained a key factor behind limited trade volumes over the past couple of days.
As per market sources, most of the manufacturers have cut their production by 40-50% on higher input costs. A few plants are also in shutdown mode to avoid losses. The recent MCL coal auction, held on 9 May, resulted in a sharp rise in bids above the base price which clearly indicated domestic coal shortage.
Hence, several plants have taken a shutdown and are waiting for prices to stabilise.
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) – Four trades in the range of INR 35,650-36,200/t were recorded during the 11:30 am to 5:30 pm SteelMint trading window and considered for final price calculation as T1 inputs. The average of these transactions was INR 35,745/t which is given a 50% weightage in the final price calculation.
- Other Price Indicators – bids/offers/indicative (T2) – Fifteen offers reported in the trading window and considered as T2 inputs. The average price of these fifteen was INR 35,868/t and given a 50% weightage in the final price calculation.
The final price for sponge CDRI exw Rourkela was at INR 35,807/t, rounded to INR 35,800/t exw.
Click for detailed methodology
T1 – Trade, T2 – Offer/Bid/Indicative, *Normalized price as per methodology
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