- Rising raw material costs push up spot offers
- Price hike expectations lead to higher offtake
India’s sponge iron prices witnessed a notable uptrend in most regions on 16 July, increasing by INR 50-300/tonne (t), particularly in the central and eastern regions, amid a surge in inquiries and active bookings. However, southern India witnessed a marginal decline of INR 50-100/t due to regional supply dynamics.
Market sentiment, trading activity
- Improved buying activity was observed following the recent raw material cost hike announcements, prompting mill owners to raise spot offers.
- Buyers, expecting further price escalations, engaged in active procurement to ensure availability and avoid near-term shortages.
- Neighbouring markets also experienced improved sentiment, supported by an increase in booking activity.
Despite limited finished steel offtake, expectations of a short-term demand recovery kept buyer interest intact, especially in key production hubs.
Raw material impact
A rise in pellet prices across major producing regions led to panic buying and increased stocking by sponge iron manufacturers and traders. Market participants are keeping a close watch on the upcoming Odisha Mining Corporation (OMC) iron ore auction, which is expected to provide further direction regarding pricing trends.
Pan-India sponge iron bookings stood at approximately 22,650 t today, a significant rise from 10,000 t recorded in the previous session, reflecting a rise in market participation and restocking activity.
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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