India: SteelMint's billet index falls as buyers resist higher offers - 21 Nov

SteelMint's daily steel billet index was assessed at INR 43,500/tonne (t) (- INR 500/t) exw-Raipur on 21 November, 2022.

The index fell after a sharp surge by over 10% a day ago. Moderate demand for finished steel due to a sharp surge in offers and unclear market trends are resulting in lower spot trades on revised (higher) offers.

Hence, a majority of buyers are resisting future buying, leading to decline in spot billet trades to around 1,650 t today as against 5,700 t on 19 November.

With the drop in billet prices, the conversion spread of the standalone furnaces in Raipur from sponge iron (PDRI) to billets declined by INR 400/t to INR 13,000/t today.

SteelMint's daily price assessment for rebars fell by INR 600/t, while wire rods prices declined INR 400/t and sponge iron offers by INR 100-200/t d-o-d.

About 1,400 t of each of wire rods and rebar deals were recorded today 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) - Five trades at INR 43,400-43,900/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 43,512/t which is given a 50% weightage in the final price calculation.
  
  
• Other Price Indicators - bids/offers/indicative (T2) - Ten offers reported in the trading window and considered as T2 inputs. The average price of these ten was INR 43,525/t and given a 50% weightage in the final price calculation.
  
  

The final price for billet exw Raipur was at INR 43,519/t, rounded to INR 43,500/t exw.

Click for detailed methodology

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