Parameters for Performance Review of Commodity

STEEL LONG

1. Background

a. Brief about the commodity such as sample picture, various varieties/grade of the
commodity found in India:

Steel industry is the heart of the global development. Steel is the

world's most important engineering and construction material. It is
used in every aspect of our lives. It’s high tensile strength and
lower cost of production which makes it a key component in
construction of building, infrastructure, tools, automobiles, heavy
machinery, weapons etc., Steel is an alloy of iron and carbon along
with other elements like magnesium, phosphorus, sulphur etc.

Globally, China is the largest producer of Steel in the world. As per

the latest data available for 2021, the Global (Crude) Steel production was 1,962.3 million tonnes and
the contribution of China was around 53%, i.e., 1035 million tonnes. India is the second largest Steel
producer in the world with a Crude Steel production of 118 million tonnes in 2021. In terms of
consumption, (Finished Steel) China is the largest consumer of Steel globally (Source: World Steel
Association)

Crop Cycle

Steel is an industrial product and its manufacturing takes place round the year. The crop cycle is not
applicable for it.

Life Cycle: Value Chain of

Major grades/Varieties
theCommodity
Major Varieties: Steel’s grade is determined by the
amount of carbon, what other alloys it contains, and the
way it has been processed. Steel is graded as a way of
classification and is often categorized into four groups-
Carbon, Alloy, Stainless, and Tool.

NCDEX: Quality Parameters

Parameter Mild Steel Ingots Mild Steel Billets
Carbon Upto 0.3% Upto 0.3%
Content
Manganese Minimum 0.4% Minimum 0.4%
Minimum Maximum Maximum 0.9%
0.9%
Sulphur Upto 0.06% Upto 0.06%
Phosphorous Upto 0.075% Upto 0.075%
Sulphur + Upto 0.135% Upto 0.135%
Phosphorous
Weight min 90 kg per ingot --
Length 48 inches per ingot 6 m +/- 200 mm
Size 3 ½ * 4 ½ inch 100*100 mm to
110*110 mm
Other Heat number to be Heat number to be
parameters mentioned on each mentioned on each
ingot. Billet.
Ingots without
harmful and Billets must have
Appreciable reasonably plain
 hollowness, piping Surface
and rising Ingots
must
hav
e
reasonably plain
surface
Additional MS Ingots MS Billets
Parameter conforming to conforming to
Bureau of Indian Bureau of Indian
Standards Standards (BIS)
(BIS)specification specification 2830
2830 or 2831 or 2831 produced
produced by a BIS by a BIS licensed
licensed plant/factory
plant/factory

b. Commodity fundamentals and balance sheet as per the following format (to be prepared
based on publicly available information on best effort basis):

Table - Fundamentals & Balance sheet (quantity)

(In million tonnes)
Global Scenario Previous FY (2021-22) * Current FY (2022-23) *
Opening Stocks NA NA
Production (Crude Steel) 1962.44 1890.06
Imports 445.11 399.13
Total Supply NA NA
Exports 460.38 402.11
Consumption (Finished steel) 1844.92 1788.06
Closing stocks NA NA
Source: World Steel Association (Report entitled ‘Steel Statistical Yearbook 2023 online version’).
NA: Data is not available in the public domain;
*Data is not available as per financial year. It is provided as per Calendar Year (CY) (Jan-Dec). Hence
FY 2021-22 corresponds to CY 2021 and FY 2022-23 corresponds to CY 2022.
Crude Steel production includes all qualities: carbon, stainless, and other alloy.
Latest data with respect to FY 2023-24 is not available.
Export as well as Import data represent addition of exports/imports of Finished + Semi-finished Steel
product exports
Consumption Data represent Apparent Steel Use (crude steel equivalent)

(In million tonnes)

Indian Scenario Previous FY (2022-23) Current FY (2023-24)* P
Opening Stocks NA NA
Production (Crude Steel) 126.26 118.95
Production (Finished Steel) 122.28 114.42
Imports (Finished Steel) 6.02 6.74
Total Supply NA NA
Exports (Finished Steel) 6.72 5.52
Domestic Consumption (Finished Steel) 119.86 112.52
Closing Stocks NA NA
Source: Joint Plant Committee (JPC); P= Provisional
*: For Current year it is applicable from April 2023 till January 2024
NA: Data is not available in the public domain;
Finished Steel includes both non-alloy and alloy (including Stainless Steel)
 (In million tonnes)
Top Steel (Crude) producing countries Top Steel (finished) consuming countries
Country Previous FY Current FY Country Previous FY Current FY
Rank (2021-22) * (2022-23)* (2021-22)* (2022-23)*
1 China 1035.24 1019.08 China 954.40 925.65
2 India 118.20 125.38 India 106.23 116.16
3 Japan 96.34 89.23 USA 97.08 94.53
4 USA 85.79 80.54 Japan 57.41 54.98
5 Russia 77.02 71.75 South Korea 56.04 51.30
6 South Korea 70.42 65.85 Russia 43.92 41.73
7 Turkey 40.36 35.13 Germany 35.51 32.40
8 Germany 40.24 36.86 Turkey 33.38 32.50
9 Iran 28.32 30.59 Mexico 25.49 24.98
10 Brazil 36.07 34.09 Vietnam 22.05 22.23
Others 334.44 301.57 Others 413.41 391.60
World 1962.44 1890.06 World 1844.92 1788.06
Source: World Steel Association (Report entitled ‘Steel Statistical Yearbook 2023 online version’).
Latest data with respect to FY 2023-24 is not available.
*Data corresponds to Calendar Year (CY) (Jan-Dec). Hence, FY 2022-23 corresponds to CY 2022
and FY 2021-22 corresponds to CY 2021.
Crude Steel production includes all qualities: carbon, stainless, and other alloy.
Consumption Data represent Apparent Steel Use (crude steel equivalent) Countries are arranged in
descending order based on the figure in Current Year (2022-23) .

(In million tonnes)

Top Steel Exporting countries Top Steel Importing countries
Country Previous FY Current FY Country Previous FY Current FY
Rank (2021-22) * (2022-23)* (2021-22) * (2022-23)*
1 China 66.21 68.13 USA 29.69 28.91
2 Japan 33.76 31.74 Germany 23.27 20.99
3 South Korea 26.78 25.46 Italy 20.76 20.21
4 Germany 23.95 22.29 China 27.82 17.06
5 Turkey 22.06 17.96 South Korea 14.07 13.67
6 Russia 32.58 17.86 Thailand 15.71 13.43
7 Italy 17.19 15.99 Belgium 13.70 12.47
8 Belgium 15.54 14.71 France 13.31 12.04
9 France 12.56 11.51 Viet Nam 12.96 11.50
10 Ukraine 15.70 4.79 Indonesia 10.25 11.22
Others 194.06 171.68 Others 263.57 237.63
World 460.38 402.11 World 445.11 399.13
Source: World Steel Association (Report entitled ‘Steel Statistical Yearbook 2023 online version’).
Latest data with respect to FY 2023-24 is not available.
*Data corresponds to Calendar Year (CY) (Jan-Dec). Hence, FY2021-22 corresponds to CY 2021 and
FY 2020-21 corresponds to CY 2020.
Export as well as Import data represent addition of exports/imports of Finished + Semi-finished
Steelproduct exports.

State-wise production of crude steel in India

NA: Data is not available in the public domain.

c. Major changes in the polices governing trade in the spot markets of the commodity (FY 2023-
24)

Date Major policies governing trade and changes

The Central Board of Indirect Taxes and Customs (CBIC) has imposed an
11-Oct-2023 anti-dumping duty on imports of Chinese Steel for 5 years. Chinese flat-base
steel wheels are now subject to an anti-dumping charge of $613 per tonne.

d. Geo-political issues in the commodity and its impact on Indian scenario (FY 2023-24)

Date Event Key Details Key Implications/Impact

--- --- No geopolitical concerns related to ---
Steel were observed during review
period.
 2. Trading related parameter

a. Monthly and Annual traded volume (quantity in appropriate units)

Annual Traded Volume
Month Year Symbol Traded volume (MT) (MT)
Apr 2023 STEEL 17,890 206,030
May 2023 STEEL 32,300
Jun 2023 STEEL 25,950
Jul 2023 STEEL 28,260
Aug 2023 STEEL 26,670
Sep 2023 STEEL 22,300
Oct 2023 STEEL 19,710
Nov 2023 STEEL 12,520
Dec 2023 STEEL 8,560
Jan 2024 STEEL 5,790
Feb 2024 STEEL 4,400
Mar 2024 STEEL 1,680

b. Annual traded volume as proportion of total deliverable supply (quantity in appropriate units)

Symbol Traded Volume (MT) Deliverable Supply( MT) Proportion

STEEL 206,030.00 118,947,000 0.00

c. Annual traded volume as proportion of total annual production (quantity in appropriate units)

Symbol Traded volume (MT) Production( MT) Proportion

STEEL 206,030 118,947,000 0.00

d. Annual average Open interest as proportion of total production

Symbol Average Open Interest (MT) Production( MT) Proportion

STEEL 1,889.18 118,947,000 0.00

e. Annual average Open interest as proportion of total deliverable supply

Average Open Interest

Symbol (MT) Deliverable supply( MT) Proportion
STEEL 1,889.18 118,947,000 0.00

f. Monthly and Annual value of trade (in Rs. Crores)

Month Years Symbol Traded Value (in Cr.) Annual value (In Cr.)
Apr 2023 STEEL 86.05 939.85
May 2023 STEEL 148.52
Jun 2023 STEEL 120.94
Jul 2023 STEEL 126.82
Aug 2023 STEEL 121.08
Sep 2023 STEEL 103.95
Oct 2023 STEEL 88.65
Nov 2023 STEEL 55.28
Dec 2023 STEEL 37.66
Jan 2024 STEEL 25.16
Feb 2024 STEEL 18.75
Mar 2024 STEEL 7.01
g. Monthly and Annual quantity of delivery (in appropriate units)

Monthly Traded Value

Month Year Traded Value(in MT)
Apr 2023 1,100
May 2023 110
Jun 2023 630
Jul 2023 500
Aug 2023 500
Sep 2023 250
Oct 2023 60
Nov 2023 410
Dec 2023 190
Jan 2024 10
Feb 2024 240
Mar 2024 300
Yearly Value of Trade 4,300

h. Monthly and Annual value of delivery (in Rs. Crores)

Monthly Delivery Value

Month Year Value in Rs Cr
Apr 2023 5.35
May 2023 0.53
Jun 2023 3.03
Jul 2023 2.27
Aug 2023 2.28
Sep 2023 1.19
Oct 2023 0.27
Nov 2023 1.80
Dec 2023 0.84
Jan 2024 0.04
Feb 2024 1.02
Mar 2024 1.27
Yearly Delivery Quantity 19.88

i. Monthly and Annual Average Open Interest (OI) (in appropriate units)

Monthly OI
Month Year OI (in MT.)
Apr 2023 1,994.71
May 2023 2,035.00
Jun 2023 2,432.38
Jul 2023 2,435.71
Aug 2023 2,697.73
Sep 2023 2,077.50
Oct 2023 1,834.50
Nov 2023 2,009.52
Dec 2023 1,778.00
Jan 2024 1,775.24
Feb 2024 1,089.52
Mar 2024 252.22
Yearly Average OI 1,889.18
j. Annual average volume to open interest ratio
Symbol Traded to Open interest
STEEL 44.70%

k. Total number of unique members and clients who have traded during the financial year

Symbol Member Count Client Count

STEEL 50 430

l. Ratio of open interest by FPOs/farmers/Hedge/VCP positions to total open interest (Annual average
as well as maximum daily value)

VCPs/ Hedger
Annual Average 0%
Maximum Daily value* 0.21%
*It is calculated on the day when commodity has highest open interest during the year.

Commodity wise client categorization is as per category details as provided by the members.

m. Number of unique FPOs / farmers and VCPs/hedgers who traded in the financial year

Commodity Count
STEEL 1

Commodity wise client categorization is as per category details as provided by the members.

n. Algorithmic trading as percentage of total trading

Commodity %
STEEL 26.53%

o. Delivery defaults
N.A.
 3. Price Movements

a. Comparison, correlation and ratio of standard deviation of Exchange futures price vis-à-vis
international futures price (wherever relevant comparable are available).
NA

b. Comparison, correlation and ratio of standard deviation of Exchange futures price vis-à-vis
international spot price (wherever relevant comparable are available) and domestic spot price
(exchange polled price).
NA

c. Correlation between exchange futures & domestic spot prices along with ratio of standard deviation.

Correlation
Futures Spot Mandi
Futures 1 -
Spot 0.946237 1 -
Mandi - - -

Standard
Deviation
Futures Spot Mandi
Futures 1 0.830696 -
Spot 1.20381 1 -
Mandi - - -

d. Correlation between international futures & international spot prices along with ratio of standard
deviation (wherever relevant comparable are available).
NA

e. Comparison of Exchange polled price and mandi price (in case of agricultural commodities) / other
relevant price (in case non-agricultural commodities) at basis centre.

Price Comparison
55000

50000
Price

45000

40000

35000
Date

Futures Spot
f. Maximum & Minimum value of daily futures price volatility and spot price volatility along with
disclosure of methodology adopted for computing the volatility. (Volatility calculated by Square root
of Standard Deviation of daily returns for the period from 01 Apr 2023 to 31 March 2024)

Volatility (Futures) Month Value

Max Aug 0.022042
Min Dec 0.005293

Volatility (Spot) Month Value

Max Mar 0.045888
Min Jun 0.005138

g. Number of times the futures contract was in backwardation/ contango by more than 4% for the near
month contract in the period under review
Contango 5
Backwardation 2
 4. Others parameters

a. Qualitative and quantitative measure for Hedge effectiveness ratio and basis Risk (Volatility of Basis) along
with disclosure of methodology adopted for such calculations. (Volatility calculated by Square root of
Standard Deviation of daily returns)

Basis Volatility 6.395319802

Hedge Efficiency 0.540231462

b. Details about major physical markets of the commodity vis-à-vis market reach in terms of availability
of delivery centers (information to be provided state-wise and UT-wise).

Major Trading
State Availability of exchange delivery centers
Centers

Mandi
Gobindgarh
Punjab Ludhina
Malerkotla
Jalandhar Mandi Gobindgarh as Basis Centre

Major Trading
State Availability of exchange delivery centers
Centers

Ghaziabad
Muzzafarnagar
Aligarh
Uttar Pradesh N.A
Varanasi
Gorakhpur
Kanpur

Major Trading
State Availability of exchange delivery centers
Centers

Raipur
Chattisgarh Raigarh N.A
Durg

Kolkatta
West Bengal Durgapur N.A

Asansol

Gandhidham
Gujarat Bhavnagar N.A

Ahmedabad
c. Details about major physical markets of the commodity and average Open Interest for each month
generated from those regions.
Note – The OI for each month is classified based on the Member level. The Average OI is on gross
level (Long OI + Short OI)

Month PUNJAB (Avg Qty UTTARPRADESH

(MT)) (Avg Qty (MT)) DELHI WEST BENGAL
Apr-23 1,491 285 719 242
May-23 1,582 434 631 237
Jun-23 1,398 604 624 800
Jul-23 1,456 505 940 809
Aug-23 2,145 463 1,136 222
Sep-23 1,795 266 646 196
Oct-23 1,428 272 588 515
Nov-23 1,667 310 601 504
Dec-23 1,830 238 553 83
Jan-24 2,141 66 491 133
Feb-24 1,081 59 264 134
Mar-24 117 38 30 34

d. Details, such as number and target audience, of stakeholders’ awareness programs carried out by
the exchange.

Following list of Awareness programme, Stakeholder engagement programme have been conducted for FY
2023-24

Sr. No. Program Type Location Participants

Investor Awareness Program Hisar 64

1.

Investor Awareness Program Ahmedabad 25

2.

Investor Awareness Program Coimbatore 60

3.

Investor Awareness Program Erode 63

4.

Investor Awareness Program Karur 49

5.

Investor Awareness Program Kanpur 50

6.
7. Investor Awareness Program Ludhiana 30
8. Investor Awareness Program Raigarh (Raipur) 44
9. Investor Awareness Program Kochi 54
10. Investor Awareness Program Patna 48
11. Investor Awareness Program Purnia 33
Kavardha, Raipur,
Investor Awareness Program 70
12. CG
13. Investor Awareness Program Kolkata 40
14. Investor Awareness Program Delhi 73
15. Investor Awareness Program Mehsana, Gujarat 31
16. Investor Awareness Program Rajkot 45
17. Investor Awareness Program Delhi 30
 Sr. No. Program Type Location Participants

18. Investor Awareness Program Durgapur 40

19. Investor Awareness Program Bhopal 40
20. Investor Awareness Program Deesa 50
21. Investor Awareness Program Indore 32
22. Investor Awareness Program Durgapur 42
23. Investor Awareness Program Indore 40
24. Investor Awareness Program Varanasi 50
25. Investor Awareness Program Lucknow 40
26. Investor Awareness Program Sirsa 35
27. Investor Awareness Program Delhi 35
28. Investor Awareness Program Indore 30
29. Investor Awareness Program Raigarh 38
30. Investor Awareness Program Kavardha, Raipur 35
31. Investor Awareness Program Ratlam 26
32. Investor Awareness Program Kolkata 94
33. Investor Awareness Program Ratlam 36
34. Investor Awareness Program Neemuch 40
35. Investor Awareness Program Delhi 41

5. Any other information to be disclosed as deemed important by the exchange or as suggested by

the PAC

N.A.
e. Steps taken / to be undertaken to improve hedging effectiveness of the contracts as well as to
improve the performance of illiquid contracts.
 Creating an awareness about the Hedge policy to bona fide hedger
 Awareness Programme at Major trading centres as well as remote location
 Attend the National as well as international conferences, Trade meets, seminars etc.
 One to one meeting/interaction with market participants and hedgers
 Creating awareness over electronic, print & social media
 Aligning the Contract Specifications as per the market requirements

*******