India: SteelMint's billet index climbs INR 500/t d-o-d on supply issues, raw material constraints - 28 July

SteelMint's billet index rose by INR 500/tonne (t) d-o-d to INR 40,750/t exw-Raipur on 28 July, 2023.

The index bounced back due to supply-side limitations and raw material availability concerns. However, daily transaction volume fell as the increase in prices was not easily accepted by the participants, forcing them to wait for the market to stabilise.

About for 3,350 t of billet deals were recorded today, compared to 4,600 t on 27 July.

Meanwhile, finished steel prices rose due to a hike in semi-finished prices and consistent buying activity in the finished segment. Rebar prices climbed by INR 700/t d-o-d, while wire rod prices increased by INR 500/t. Sponge iron prices moved up by INR 550/t today.

Around 1,300 t of wire rod and 2,200 t of rebar deals were concluded in Raipur today.

PDRI to billets conversion spread

The conversion spread from sponge iron (PDRI) to billets of the standalone furnaces in Raipur was recorded at INR 13,800/t.

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) - Seven trades at INR 40,700-40,800/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 40,767/t which is given a 50% weightage in the final price calculation.
  
  
• Other Price Indicators - bids/offers/indicative (T2) - Nine offers reported in the trading window and considered as T2 inputs. The average price of these nine was INR 40,719/t and given a 50% weightage in the final price calculation.
  
  

The final price for billet exw Raipur was at INR 40,743/t, rounded to INR 40,750/t exw.

Click for detailed methodology

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