Steelmint: India Steel Composite Index continues to decline

SteelMint India Steel Composite Index edged down further by 0.5%. The flat steel index dropped by 1% on declining prices for both raw materials and finished steel products, whereas those of rebar edged up by 1% on the week.

SteelMint is pleased to announce the launch of the India Steel Composite Index. Backed by robust calculation methodologies, the index is derived from the Long Steel and Flat Steel Composite Indexes. The index will serve as a benchmark for end-users, EPC contractors, and manufacturers in the iron and steel industry to settle contracts or understand the market cost of physical supply of commodities such as rebar, wire rod, structurals, HRC, CRC, plates as well as galvanised plates.

• The composite index is assessed on a weekly basis: every Friday at 18:30 IST, as per the weighted average prices based on manufacturing capacity and production.
  
  
• SteelMint considers the composite index with the base year being 3 Jan'2020 (financial year 2019-2020) and the base value as 100.
  
  
• The composite index doesn't give the absolute price.
  
  
• The Indian steel industry is broadly classified into the BF-BOF and the electric/induction furnace routes. Keeping this broad classification in view, SteelMint proposes to release the composite index by considering both production routes by manufacturing capacity and the production weighted method to compute the index for India. For details click to view the methodology document.
  
  

India Steel Composite Index falls marginally, w-o-w
The index was assessed at 158 on 10 Dec'21 a marginal decline of 0.5%, week-on-week and 6% on the month.

The falling prices of flat steel products in the market weighed on the India Flat Steel Composite Index. For instance, the trade reference price of hot-rolled coils has rolled back to levels last seen at the end of Sep'21. SteelMint's benchmark assessment for HRC (IS 2062, 2.5-8mm) dated 8 Dec'21 stands at around INR 66,000-67,000/t which are just above the levels of INR 65,000-65,500/t at the end of Sep'21. The prices mentioned are exclusive of GST @18%.

The softening of domestic market prices and sentiments have also been impacted by the dropping export offers. Although the Chinese HRC (SS400) export offers have increased marginally this week to $775-785/t FOB, SteelMint's India HRC export index has dropped to 9-month lows at $790/t FOB East Coast. The steel mills had to reduce their offers for the past four weeks to entice overseas buyers alongside falling global prices and competitive offers from other exporting countries.

The India Steel Long Composite Index, however, remained stable this week, bringing some moderation in the Steel Composite Index. The daily assessment of domestic market prices of rebar (IS 1786, 12-25mm, Fe 500, IF route) which were on descent from INR 49,100/t exy-Mumbai levels by the middle of first week of December, started recovering this week and have increased to the levels of INR 49,300/t exy-Mumbai as of 10 Dec'21. The prices mentioned are exclusive of GST @18%.

From a global perspective, HRC futures contracts for May'22 delivery on the Shanghai Futures Exchange (SHFE) stand at around RMB 4,664 (approximately $732/t), down 1.31% m-o-m as on 10 Dec'21. Meanwhile, the HRC contract for May'22 delivery on SHFE stands at RMB 4307/t ($676/t), up by 1.53% m-o-m.