India: SteelMint billet index falls further on lower bids, weak finished steel sales - 29 Aug

SteelMint's daily steel billet index was assessed at INR 47,500/tonne (t) (- INR 650/t) exw-Raipur on 29 August, 2022.

About 2,500 t of transactions were recorded today as against 3,150 t on 27 August.

The index fell sharply on account of lower bids, which were about INR 500 lesser than the offers on account of weak finished steel sales. A few major buyers held on to purchases today having placed sufficient orders during the previous week. Hence, they were in no hurry to buy and kept bidding lower. This in turn triggered a sharp fall in spot billet prices in Raipur.

In addition, the key factor was a constant fall in steel prices in the northern region, which has pulled down prices across regions.

Today, the conversion spread (margins) from sponge PDRI to billets fell further to around INR 13,800/t for standalone furnaces in Raipur.

SteelMint's daily price assessment of wire rods fell by INR 700/t and rebars by INR 400/t, while sponge iron prices fell by INR 300/t in Raipur today.

About 750 t of transactions in wire rods and around 600 t of rebar deals were recorded in today's trading session in Raipur.

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 at INR 47,300-47,700/t were recorded during the 2:30 pm to 5:30 pm SteelMint trading window and considered for final price calculation as T1 inputs. The average of these transactions was INR 47,512/t which is given a 50% weightage in the final price calculation.
  
  

• Other Price Indicators - bids/offers/indicative (T2) - Sixteen offers reported in the trading window and considered as T2 inputs. The average price of these sixteen was INR 47,531/t and given a 50% weightage in the final price calculation.
  
  

The final price for billet exw Raipur was at INR 47,522/t, rounded to INR 47,500/t exw.

Click for detailed methodology

T1 - Trade, T2 - Offer/Bid/Indicative, *Normalized price as per methodology