SteelMint: India Steel Composite Index rises as mills revise prices upwards for March

This week, Indian steel majors announced price hikes for both long and flat steel products, pushing higher SteelMint's India Steel Composite Index by 6.8% to 178. Steel behemoths in both the public and private sectors increased prices by 2,500-3,000/t for hot-rolled (HR) coil, plates and cold-rolled coil. In the blast furnace (BF) route long product segment, mills announced an increase of about INR 4,000-5,000/t for early March sales.

The Index is backed by robust calculation methodologies and is derived from the long steel and flat steel composite indices. It serves 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.
    
    
  
  
  

The flat steel index stood at 178.7, up 4% from 172.4 a week ago. Prices of flat steel products shot up in the trade segment as price hikes were announced by the mills.

Export deals sealed for HRCs with the European countries at higher price levels lately amidst the geo-politial turmoil between Russia and Ukraine majorly drove prices higher.

Current HRC export offers to EU countries stand at around $1,100/t CFR (INR 84,055/t) whereas in the domestic market prices were assessed at INR 68,000-69,000/t exy-Mumbai, excluding GST @ 18%.

Thus, there is still a major gap between domestic trade market prices and export realisations, and prices are going to go up in the short to medium term.

Moreover, prices of value-added products such as cold-rolled and galvanised steel coils also gained momentum due to elevated prices for substrate hot-rolled products.

The long steel index rose steeply by 10.1% w-o-w to 177.4. Cost push due to elevated prices of raw materials, supply side constraints and material shortages for a few grades provided further support to prices of both induction furnace (IF) and blast furnace (BF) long steel products. Meanwhile, trades also improved this week compared with the past couple of weeks.