- Moderate bookings continue at lower offers
- Subdued steel demand triggers minor price correction
India’s sponge iron market witnessed a moderate downtrend on 15 July 2025, with prices declining by INR 50-150/tonne (t), particularly across the southern, eastern and central regions. Buying remained need-based, influenced by continued weakness in the finished steel segment and monsoon-related disruptions.
Market sentiment
Sentiments remained cautiously bearish, despite lower price offers. Modest improvement in procurement was noted compared to the previous session, with re-rollers and secondary producers opting for selective restocking. However, subdued demand in the finished steel market continued to limit bulk bookings.
Raw material impact
- Rising pellet costs have raised input expenses for sponge iron manufacturers, pushing many to hold semi-finished steel prices firm despite weak downstream demand.
- In response, most sponge iron units are operating at 50% capacity utilisation in southern India, just sufficient to meet the current subdued demand.
- Kiln economics have worsened, and manufacturers are prioritizing profitability over volume, leading to lower overall output and a tighter supply environment.
Despite the decline in spot prices, mills expect some stability in the near term, supported by constrained supply and rising input costs.
Rationale
Prices have 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%.
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