India: SteelMint's billet index falls INR 250/t on weak steel demand - 6 Sep

SteelMint's billet index edged lower by INR 250/tonne (t) d-o-d to INR 45,000/t exw-Raipur on 6 September, 2023.

The index dropped as a result of negative market sentiment and weak finished steel demand, which also resulted in a moderate decrease in trade volumes today, impacting offerings. Bookings remained constrained d-o-d due to cautious buying amid weakening steel market sentiment.

Transactions for 1,700 t were recorded today as against 2,800 t on 5 September.

The finished steel market witnessed a decline in prices across sub-commodities. Prices of wire rods moved down by INR 400/t, while rebar prices fell by INR 300/t today. Sponge iron prices in Raipur declined INR 350/t d-o-d.

Around 1,200 t of rebar deals were concluded in Raipur today.

PDRI to billet conversion spread

The conversion spread from sponge iron (PDRI) to billets of the standalone furnaces in Raipur was recorded at INR 13,950/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) - Six trades at INR 44,900-45,100/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 45,013/t which is given a 50% weightage in the final price calculation.
  
  
• Other price indicators - bids/offers/indicative (T2) - Fourteen offers were reported in the trading window and considered as T2 inputs. The average price of these fourteen was INR 45,018/t and given a 50% weightage in the final price calculation.
  
  

The final price for billet exw Raipur was at INR 45,016/t exw, rounded to INR 45,000/t exw.

Click for detailed methodology

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