Steelmint: India Steel Composite Index falls further on weak market sentiments
SteelMint India Steel Composite Index edged lower by 1%. The flat steel index declined by 2% with all the sub-indices moving lower, while the long steel index fell by 1%,...
SteelMint India Steel Composite Index edged lower by 1%. The flat steel index declined by 2% with all the sub-indices moving lower, while the long steel index fell by 1%, with the wire rod index dropping by 3%. Slow trading momentum and declining prices of finished steel products 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 156 on 17 Dec'21, a marginal decline of 1%, week-on-week, and 5% on the month.
Low sales volumes in the domestic and overseas markets weighed on both trade sentiments and prices of finished flat steel products, dragging down all the sub-indices over the week.
The apprehension of a further decline in prices has forced end-users to make need-based purchases which, in turn, impacted procurement patterns across the distribution network. Furthermore, low overseas buying interest has also added to the woes of manufacturers who are likely to witness an increase in inventory, with mills under maintenance getting back to operations and incremental capacity expected to come onstream.
Similarly, the long steel index witnessed a decline largely due to the 3% fall in the wire rod index. The sales scenario in the finished long product category has also been dismal.
However, the structural steel and rebar sub-indices remaining unchanged has lent some support to the Steel Composite Index. Rising prices of feedstock for IF route steel producers pushed up prices of rebar during the week under review.