- Trade volumes slide sharply as buyers turn cautious
- Rising raw material costs squeeze producers’ margins
Indian sponge iron prices declined by INR 50-400/tonne (t) across key regions on 11 February. Buying activity remained subdued across the market during the day as prices corrected, keeping buyers in a wait-and-watch mode. Over the last few days, rising raw material prices and tight supply had allowed manufacturers to keep offers firm despite sluggish demand; however, persistent muted trading activity prompted sellers to reduce their offers today.
Demand in the finished and semi-finished steel segments remained slow to moderate across regions, which failed to provide adequate support to sponge iron prices. Muted buying interest from downstream segments kept market sentiment cautious, resulting in limited pricing strength.
Trade volumes declined further to around 4,000 t today from nearly 9,300 t in the previous session, reflecting a continued slowdown in market activity. On the cost front, pellet prices increased by INR 100/t, with Raipur pellets assessed at around INR 10,450/t ex-works, squeezing producers’ margins.
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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