Steelmint: India Steel Composite Index edges lower on weak trade momentum

SteelMint India Steel Composite Index edged down by 1% this week. The flat steel index declined by 1% with all the sub-indices moving lower, while the long steel index also fell by 1%, barring the wire rod index which inched up 1%.

Trading momentum remains slow, and declining prices of finished steel products continues to weigh on the Composite Index.

SteelMint has recently launched the India Steel Composite Index. Backed by robust calculation methodologies, the index is derived from the long steel and flat steel composite indices. 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'20 (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 continues to slide

The index was assessed at 154 on 24 Dec'21, a marginal decline of 1%, week-on-week, and 5% on the month.

The continual decline in finished flat steel products weighed on the sub-indices over the week. Indian domestic trade prices of hot-rolled coils (HRC) slumped to a 6-month low on the back of a continual decline in HRC export offers which are at a 9-month low and subdued domestic demand leading to rising inventories in the domestic market.

HR Plate prices, too, fell to a 5-month low this week. The apprehension of a further decline in prices is likely to keep domestic flat steel prices under pressure.

Similarly, the long steel index dropped by 1% on the back of sluggish sales in the domestic market. However, the demand in the country's largest market for longs, Delhi and the National Capital Region (NCR), is likely to improve in the coming days as the Commission for Air Quality Management (CAQM) has relaxed the ban on construction and demolition activities in the wake of improvement in the air quality index (AQI) over the last few days.