SteelMint: India sponge iron prices fall amid decreasing steel prices – 9 Jan

India’s sponge iron prices fell by INR 50-350/t in key locations amidst a sharp correction seen in semi-finished steel prices in northern India and lack of buying enquiries for the material due to weak sentiments in the spot market. These factors prompted sponge suppliers in various regions to reduce offers. However, purchase enquiries increased a bit in the second half of today’s trading session as markets saw marginal improvement towards the day’s end.

About 15,800 t of sponge iron transactions were recorded today in India. as against 11,050 t on 7 January.

Trade dynamics

• Rourkela: CDRI (FeM 80%) prices were assessed at INR 32,500/t exw. There was lack of buying interest from participants. Thus, spot trades remained low.
• Raipur: PDRI (FeM 80%) prices were assessed at INR 32,000/t exw. Moderate buying activity was seen today in the Raipur market. There was a steep fall in the prices on offer at lower levels. The market declined by INR 350/t today as compared to prices recorded on 7 January. The volatility in the northern markets also contributed to the low prices today.
• Bellary: PDRI (FeM 80%) prices were assessed at INR 29,950/t exw. CDRI prices stand at INR 31,400/t exw. Buying activity in sponge iron was noted to be slow today, resulting in a drop in prices throughout the day. Sources predicted that the market will stay mostly stable in the coming days.
• Durgapur: PDRI (FeM 78%) prices were assessed at INR 32,100/t DAP. Spot trades were moderate throughout the day. Seller reduced offers as declining prices in other regions kept buyers away from bulk bookings. Prices today witnessed a fall of INR 250/t as compared to day before yesterday.
• Ramgarh: PDRI (FeM 78%) prices were assessed at INR 30,700/t exw, and CDRI at INR 33,200/t exw. Trade activities remained dull in the region amid limited buying. Demand seemed impacted as northern and nearby markets noticed price corrections. Lesser chances of price corrections are expected subsequently due to stability in raw material prices, market participants stated.

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%.

Click for detailed methodology

T1 – Trade, T2 – Offer/Bid/Indicative