Amidst the currently prevailing recessionary trend and speculative steel price scenario, SteelGuru.com has started the much needed barometer to track and measure the price movements on daily basis.
Steel prices being an issue at the forefront of economic development has been drawing significant government attention .China being the brand bearer in steel consumption and production has a major impact on the global steel market with slightest fluctuation in the dynamics. China has been as badly affected leading to slump in economic growth rate to 8% Q4 against the last years average of 12%.
All the major mills in China has pruned their production by up to 30% since the onset of recession (August 08) . In the end of 2008 government has announced a slew of short term resurrecting measures as follows:
1)Economic revival package of $500 billion targeting mainly the infrastructure sector. Maintain a reserve inventory of 2 mt of steel.
2)Removal of export duty on 67 steel products (including : HR coil, HR medium plate, section and some alloy steel).
These along with some long term measures like consolidation of steel holdings and phasing out of redundant capacities are bound to alter the scenario in steel industry thereby accentuating the need to closely monitor the price movements as it leads to direct impact on the end user cost and the subsequent commodity prices.
Unfortunately, the facts are misrepresented very often due to magnanimity of the Chinese market in particular and complexity in the structure and the dynamics of the steel market in general, leaving the users of the information mostly in a state of confusion.
In order to provide a index for steel prices, we call it SENSEX for steel, SteelGuru.com decided to work on both long products and flat products for respective category indices as also a composite one for steel. We call them CLPPI, CFPPI and CHISPI and have started releasing these indices on a weekly basis with effect from July1st 2008, after taking first week of July 2008 as base.
CLPPI is based on weekly market prices of three benchmark products Wire rod and rebar, whereas CFPPI is based on plates, HR, CR and HDG. These indices have been built considering their respective weights in the composite categories as also in the shares of sales in the country.
The pricing input is from www.steelprices-china.com, which publishes market transaction prices of benchmark products from select locations 5 days a week.
These price indices outline the way domestic steel market is moving day by day and will help producers, agents in the supply chain, steel buyers, bankers and analysts in their respective businesses.