Sponge Iron prices remain muted amid limited buying activity

• Prices remained muted amid weak buying
• Muted finished steel demand capped sponge iron demand

Sponge iron prices were largely stable on 2 February, with select regions witnessing a decline of INR 50–200/t. Buying activity remained low to moderate, as market enquiries were limited during the day. Market participants highlighted that sizeable bookings had already been concluded in previous sessions, and mills are presently focused on dispatching earlier confirmed orders.

Finished steel demand remained muted, while buying interest in the semi-finished segment was measured, which in turn impacted sponge iron demand. It was observed that market offerings were also remained limited due to muted buying interest from the buyers’ end. Despite moderate demand, sellers refrained from initiating any major price cuts, keeping prices within a narrow range. Under the current market scenario, prices are expected to remain range-bound.

Trade volumes were recorded at around 10,800t today, compared with 7,500t in the previous session; however, market participation remained weak. On the cost front, raw material prices moved up by INR 200/t with pellet prices in Raipur assessed at INR 9,850/t ex-works, while iron ore prices also held steady, offering 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%.