India: SteelMint's billet index increases INR 200/t on improved buying - 31 Aug

SteelMint's billet index increased by INR 200/tonne (t), reaching INR 45,300/t exw-Raipur, on 31 August, 2023.

The spike was further fuelled by a significant increase in raw material prices that coincided with the rise in the billet index. With players anticipating robust market activity in the following days, buying activity in semi-finished steel and sponge iron climbed somewhat across the region today. This was made possible by a large increase in raw material prices.

Approximately, 3,500 t of transactions for billets were finalised today as opposed to 2,100 t on 29 August.

Inconsistency in pricing among sub-commodities was also seen in the finished steel market. Today, regional prices for wire rods increased by INR 200/t d-o-d while those for rebar and sponge iron remained stable.

Deals for 1,200 t of rebar and about 550 t of wire rods were completed in Raipur.

PDRI-to-billets conversion spread

In Raipur, the standalone furnaces' conversion spread from sponge iron (PDRI) to billets was INR 13,600/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) - Five trades at INR 45,300-45,500/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 45,317/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 45,289/t and given a 50% weightage in the final price calculation.
  
  

The final price for billet exw Raipur was at INR 45,303/t exw, rounded to INR 45,300/t exw.

Click for detailed methodology

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