India: Sponge iron demand remains moderately low, prices fluctuate

• Mixed price movement seen amid cautious sentiment

• Trade volumes drop, cost support remains stable

Sponge iron prices witnessed a mixed trend on 30 January, with prices fluctuating in the range of INR 100–400/t across regions. Buying activity remained low-to-moderate, as limited enquiries were reported in the market during the day. Market participants indicated that substantial bookings had already taken place over the past few sessions, and mills are currently focused on dispatching previously booked material. Additionally, with the upcoming Union Budget, the market is in a wait-and-watch mode, with participants expecting an improvement in sentiment in the coming week.

Finished steel demand remained measured, while buying activity in the semi-finished segment staying slow but steady. However, relatively better momentum in raw material prices offered some support to prices. Under the current market scenario, prices are expected to remain range-bound.

Trade volumes slipped to around 7,500t today, compared with 12,750 t in previous session, indicating weaker participation. On the cost front, raw material prices remained largely stable, with pellet prices in Raipur assessed at INR 9,650/t ex-works, while iron ore prices held steady, thereby providing cost-side support to DRI producers.

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%.