India: Sponge iron prices continue to decline on sluggish spot trading – 3 Feb

In key Indian markets today sponge iron prices fell in the range of INR 50-450/t. Uncertain price movements followed by limited trades weighed on prices, as buyers took a cautious approach and engaged only in need-based procurement to meet immediate requirements. This resulted in low spot buying interest and a drop in trade volumes.

In addition, market uncertainty also contributed to the sluggishness in trade activity, as market participants were unsure about the direction of prices and therefore hesitant to make bulk purchases. Going ahead, market participants are hoping for stability in prices.

About 11,460 t of sponge iron transactions were recorded today in India as against 10,010 t on 2 February

Snapshots of key markets

• Rourkela: Buyers were cautious and procured material as per immediate requirements and on lower offers. Thus, prices continued to soften.
• Raipur: No buying activity was observed. The market was slow and prices of semi-finished steel declined. The prices offered by sellers were not accepted in the market and buyers refrained from booking at the prevailing price levels. In the northern region, the market showed a downward trend. Since sufficient bookings were concluded over the past few days buyers showed less initiative.
• Bellary: Sponge iron prices continued to fall further due to weak demand. Buyers weree hesitant to acquire material at current offers. Purchase enquiries also remained low today.
• Durgapur: Sellers were under pressure because of weak demand followed by a rise in inventories. Therefore, in view of rising inventory and lack of spot demand, market sources are expecting prices to remain under pressure in coming term.
• Ramgarh: Average trade volumes were recorded. Buyers continued to book material as per needs. Suppliers reduced their offers due to the ongoing price correction. Market participants are waiting for clear market directions to emerge before taking positions.

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