India's SteelMint billet index hits 7-month low on limited demand - 3 July

The SteelMint billet index in India recorded a 7-month low on 3 July, 2023, dropping by INR 600/tonne (t) to INR 42,400/t exw-Raipur.

This decline in the index is attributed to weak performance in the finished steel sector across the country, leading to reduced demand for billets.

The prevailing offers of billet were last seen in the first week of December 2022, indicating a prolonged period of limited demand. Consequently, the billet index experienced a significant downturn, with finished steel prices falling in the range of INR 100-600/t d-o-d. This decline in finished steel prices further dampened buying activity in the market.

However, there was a slight improvement in the buying activity for semi-finished steel amid lower offerings and participants anticipating improvement in market sentiments in the near future.

Transactions for semi-finished steel amounted to 2,680 t, compared to 1,250 t on 1 July.

In the finished steel category, rebar prices fell by INR 100/t, while wire rod prices experienced a larger drop of INR 500/t. Additionally, prices of sponge iron fell by INR 200/t in Raipur.

About 550 t of wire rods and 300 t of rebars deals were recorded in Raipur today.

The conversion spread from sponge iron (PDRI) to billets for standalone furnaces in the region was reported at INR 15,550/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) - Four trades at INR 42,350-42,500/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 42,404/t which is given a 50% weightage in the final price calculation.
  
  
• Other Price Indicators - bids/offers/indicative (T2) - Six offers reported in the trading window and considered as T2 inputs. The average price of these six was INR 42,433/t and given a 50% weightage in the final price calculation.
  
  

The final price for billet exw Raipur was at INR 42,419/t, rounded to INR 42,400/t exw.

Click for detailed methodology

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