SteelMint: Billet index falls on continued weak finished steel demand - 5 Sep

SteelMint's daily steel billet index was assessed at INR 47,000/tonne (t) (- INR 500/t) exw-Raipur on 5 September, 2022.

About 3,050 t of transactions were recorded today as against 400 t on 3 September.

The index fell on account of persistent weak finished steel sales, which forced buyers or re-rollers to keep bids lower. Ultimately spot prices moved down sharply in today's trade.

In line with the supply of billet, the standalone furnaces and hot charging plants have opted for a measured production on schedule on account of low margins. The conversion spread from sponge PDRI to billet in Raipur stood at around INR 14,200/t today.

SteelMint's daily price assessment for wire rods fell by INR 500/t and sponge iron by INR 400/t, while rebar prices fell by INR 200/t in Raipur today.

About 600 t of transactions in wire rod were recorded, while SteelMint recorded rebar trade volumes at 1,400 t in Raipur during today's trading window.

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) - Nine trades at INR 46,900 - 47,000/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 46,987/t which is given a 50% weightage in the final price calculation.
  
  

• Other Price Indicators - bids/offers/indicative (T2) - Thirteen offers reported in the trading window and considered as T2 inputs. The average price of these thirteen was INR 47,017/t and given a 50% weightage in the final price calculation.
  
  

The final price for billet exw Raipur was at INR 47,002/t, rounded to INR 47,000/t exw.

Click for detailed methodology

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