SteelMint's billet index drops as market activity subsides - 27 Oct

SteelMint's daily steel billet index was assessed at INR 46,800/tonne (t) (- INR 500/t) exw-Raipur on 27 October, 2022.

The index fell sharply as trade participants remained inactive along with poor offtake of finished steel products. As per sources, due to limited availability of workforce with re-rollers, buyers are less active in book material, which led to the fall in prices.

Amidst lack of working hands, the rolling mills were less active compared with sponge iron and billet plants, SteelMint notes.

Also, declining prices in the northern region weighed on steel prices across regions. Spot billets deals of 2,750 t were recorded today in Raipur as against 2,000 t on 22 October.

With the sharp fall in billet prices, the conversion spread (from sponge PDRI to billets) of standalone furnaces in Raipur fell by INR 400/t to INR 15,100/t.

SteelMint's daily price assessment for wire rod and sponge iron dropped by INR 300/t, while that for rebar inched down by INR 100/t today in Raipur.

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) - Five trades at INR 46,700-47,200/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 46,809/t which is given a 50% weightage in the final price calculation.
  
  
• Other Price Indicators - bids/offers/indicative (T2) - Nine offers reported in the trading window and considered as T2 inputs. The average price of these nine was INR 46,800/t and given a 50% weightage in the final price calculation.
  
  

The final price for billet exw Raipur was at INR 46,805/t, rounded to INR 46,800/t exw.

Click for detailed methodology

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