India sponge iron prices dipped further by INR 50-400/t in key locations. A lack of confidence among market participants led to limited spot trades as buyers are only purchasing material as per their immediate requirements. This is a common pattern in markets where future price movements are uncertain.
One of the main reasons for the lack of confidence among market participants is the volatility in sponge iron prices. Prices of this material have been fluctuating frequently, making it difficult for buyers and sellers to predict future movements. This uncertainty has led to a cautious approach among market participants, resulting in limited spot trades. Another factor that has contributed to lower prices is the slow demand for sponge iron in the domestic market.
About 25,800 t of sponge iron transactions were recorded today in India as against 12,450 t on 18 January.
Snapshots of key markets
- Rourkela: Although prices fell, trades improved as a few buyers resumed purchases, resulting in a rise in spot trades compared to yesterday. Spot buying interest totally hinges on the requirements of market participants.
- Raipur: Active trading activity was witnessed on bulk buying. Good momentum was observed in the market today and substantial orders were booked by buyers. Though there was not any significant drop in prices still there was acceptance of the offered prices. Sponge iron prices dipped further by INR 50/t today but the market picked up momentum in the second half, resulting in bulk booking. The fluctuating nature of the northern region’s markets kept prices in check.
- Bellary: Spot buying in sponge iron increased owing to lower offers quoted from sellers to enhance sales, which resulted an improvement in trade volumes d-o-d amid semi-finished steel price fluctuations throughout the day.
- Durgapur: Prices dropped at the beginning of the day but recovered later due to rise in northern region offers. Trades were moderate today as buyer were cautious in this volatile market. Prices dropped marginally by INR 50/t d.o.d.
- Ramgarh: The market here seemed slow in the first half whereas it improved by evening as the northern market started gaining pace. However, price fluctuations forced buyers to procure in small parcels.
To revive the market, it is important to bring stability in prices, and that can be achieved by creating a balance between the supply and demand of sponge iron.
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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