Sponge iron prices in India have witnessed a significant hike over the last few days with prices rising by INR 300-550/t in key locations. The increase in prices is due to active demand, optimism in the spot market, and higher offers quoted by suppliers. Producers have been able to keep prices on the higher side due to a flurry of deals taking place, which were partly driven by the rise in billet prices by INR 200-550/t.
These positive market sentiments have led to buyers taking positions which, in turn, has resulted in an increase in trade volumes. However, participants remained on a wait-and-watch mode, specially in the central region, and buying activity remained subdued today.
About 21,200 t of transactions were recorded in the domestic markets today as against 16,410 t yesterday.
Snapshots of key markets
- Rourkela: A significant improvement in spot trade was seen today compared to yesterday. Several deals were concluded. Purchase enquiries increased amidst rising steel prices in the Punjab market, which nudged producers to float offers at higher levels.
- Raipur: No trading activity was observed today in Raipur. Sellers kept offers firm owing to market uncertainty and also because they have sold a sizeable volume of material over the last few days. Prices increased by INR 300/t today but no deals were reported at such high prices. Overall the market remained slow as buyers adopted a wait-and-watch approach.
- Bellary: Sponge iron offers remained strong today, yet bookings slowed d-o-d as sellers had sufficient orders in hand, while buyers had booked a considerable volume yesterday.
- Durgapur: The market saw an uptrend in prices on account of positive sentiments prevailing in north India. Spot trades remained moderate throughout the day as prices rose by INR 400/t d-o-d.
- Ramgarh: Active demand for semi-finished steel was reported in central and eastern India. Hence, prices remained on the higher side even as healthy demand was seen in the western and northern regions.
Market participants forecast sponge iron prices to continue to remain strong in the near term.
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
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