India steel index dips w-o-w in dull market. Short term likely to lack fizz

• IF prices weaker, longs impact index
  
  
• Flat steels fare better as imports decline
  
  
• Upcoming festival may keep trade slow
  
  

Morning Brief: The BigMint India Composite Steel Index entered the negative zone yet again after a three-week positive run. The index has been fluctuating a great deal, albeit in a narrow range for months now. On 10 January, 2025, it closed down an insignificant 0.7% at 128.1 points against 129 seen on 3 January.

Both longs and flats showed negligible dips, but the former fared somewhat poorer, down almost 1% while the latter was more or less stable. Longs, in fact, dragged the index down marginally.

Factors that impacted the index last week

Trade-level rebar sees marginal dip: It may be recalled, Indian tier-1 mills increased rebar list prices by up to INR 1,000/t ($12/t) for early-January 2025 sales. Post-revision, list prices hovered at INR 51,500-52,500/t ($598-609/t) on landed basis.

However, trade-level blast furnace (BF) rebar prices witnessed a drop w-o-w across major markets owing to slow demand. The current week's rebar prices (12-32mm) in the trade segment dropped by INR 100/t ($1/t) w-o-w to INR 52,500/t ($609/t) exy-Mumbai, excluding 18% GST.

In the project segment, prices remained static w-o-w at INR 49,500-50,500/t ($474-586/t) FOR Mumbai.

IF rebar sees sharper drop: Induction furnace (IF) rebar trade prices, however, witnessed a slightly sharper INR 500/t ($6/t) decline compared to BF material, on w-o-w basis to INR 47,000/t ($545/t) exw-Mumbai amid slow buying activity across markets.

Manufacturers reduced their list prices and offered discounts to liquidate material. Inventory idling time was at around 10-12 days across regions. Overall, the market has seen some fluctuations.

Flats stable w-o-w in dull market: India steel index dips w-o-w in dull market. Short term likely to lack fizz BigMint's bi-weekly benchmark assessment for hot rolled coils (IS2062, grade E250, 2.5-8mm) and cold rolled coils (IS513, grade O, 0.9mm) remained unchanged on 7 January, 2025, at INR 46,600/t ($541/t) and INR 53,400/t ($620/t), respectively. The prices, quoted ex-Mumbai, are exclusive of 18% GST and applicable for cut-to-length (CTL) deliveries.

Despite a marginal price increase earlier, buoyed by hopes of a positive outcome of the safeguard duty investigation, market sentiment remained subdued due to limited demand and continued low-priced transactions. As the week progressed, with supply normalising, the price increase in the northern region began to show slight corrections.

Thus, overall, flats moved in a narrow range, dipping a mere 0.16%.

Imports in declining trend: As per BigMint's vessel line-up data, the cumulative import volume touched 473,222 t in December 2024 against 571,656 t in November and 687,297 t in October. This trend has also put the flats segment in some ease.

Exports continue to remain lacklustre: The export market continued to lack sparkle even in the second week of 2025. Indian HRC export offers to the Middle East remained stable w-o-w, at around $535/t CFR UAE. Trade activities remained sluggish due to competitive Chinese offers which were down by $10-15/t w-o-w to $500-505/t.

India's offers to Europe were stable w-o-w at $590-595/t CFR Antwerp ($540-545/t FOB, east coast India). Although buyers were back from the Christmas and New Year holidays, they preferred to wait and watch price directions instead of making active purchases. Overall, the holiday sluggishness continued for yet another week.

Outlook

Indian steel prices may continue to move in a narrow range in the near term because of the upcoming Sankranti and Pongal festivals. Buying is expected to be slow which, in turn, can keep prices dull or a tad down.

India Steel Composite Index

The India Steel 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.

BigMint considers the Composite Index with the base year being 3 January 2020 (financial year 2019-2020) and the base value as 100. The Composite Index does not give the absolute price but a trend of the market. The Indian steel industry is broadly classified into the BF-BOF and the electric/induction furnace routes. Keeping this broad classification in view, BigMint 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.