Sponge iron prices in the domestic market continued the declining trend in September, falling by as much as 7% m-o-m, as per SteelMint data. Domestic sponge iron prices were weighed down by the marginal correction in raw material (pellet) prices in late-September. On the other hand, as per SteelMint data, the monthly average pellet price in Raipur fell 8.2% m-o-m to INR 8,160/t DAP.
Trade improves slightly but still less than usual
Trade volumes saw a marginal rise on the back of stable demand and improved supply as mills scaled up production on good margins with the monsoons coming to an end. But volumes were still lower-than-usual as buyers were cautious due to uncertain price trends.
In addition, the festive holidays of Vishwakarma Puja and Durga Puja slowed down trading activity in September.
Outlook
Sponge iron prices are expected to either remain rangebound or edge lower in the near-term on account of improved availability of substitute products. Furthermore, the upcoming festive holidays of Dipawali are expected to keep demand on the lower side, SteelMint notes.
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