SteelMint's billet index records two-fold surge in spot trading - 20 Sep

SteelMint's daily steel billet index was assessed at INR 47,250/tonne (t) (- INR 450/t) exw-Raipur on 20 September, 2022.

But spot billet transactions rose nearly two-fold to around 7,120 t today as against 4,300 t on 19 September.

Even though the index dropped, spot trade improved as the major rolling-mills had a dry pipeline of inventory. Hence, they have taken positions to book billets.

In addition, some participants believe that prices should not fall sharply as there is a positive statement from the ministry about the recently-imposed export duties.

With a decline in sponge iron and billet prices, the conversion spread of standalone producers from sponge PDRI to billets inched down by INR 50/t to INR 15,350/t in Raipur today.

SteelMint's daily price assessment of sponge iron and wire rods dropped by INR 400/t, and that of rebars by INR 200/t in Raipur today.

Deals of around 900 t of wire rods were recorded today as against 350 t yesterday. Also, 1,600 t of rebars trade were reported in today's trading window, against 600 t yesterday.

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) - Eight trades at INR 47,200-47,400/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 47,283/t which is given a 50% weightage in the final price calculation. Apart from these two trades of INR 47,400 & INR 47,500 recorded at 1:36 pm & 2:27 pm were excluded due to timing.
  
  

• Other Price Indicators - bids/offers/indicative (T2) - Eight offers reported in the trading window and considered as T2 inputs. The average price of these eight was INR 47,256/t and given a 50% weightage in the final price calculation.
  
  

The final price for billet exw Raipur was at INR 47,270/t, rounded to INR 47,250/t exw.

Click for detailed methodology

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