India – Sponge Iron prices decline amid weak demand and low trade activity

• Sponge Iron Prices Fall as Demand Remains Weak
• Muted Buying and Lower Trade Volumes Pressure Prices

Indian sponge iron prices declined by INR 50-250/t across key regions on 16 February. However, Rourkela and Chennai registered a marginal increase of around INR 100-200/t, largely due to restricted availability and minimal market participation, while overall demand conditions remained weak. Buying interest remained muted across regions as falling prices kept buyers in a wait-and-watch mode, with expectations of further correction. Enquiry levels were limited, resulting in subdued market participation and overall slow trading activity during the day.

Demand in the finished and semi-finished steel segments remained slow across regions, keeping overall market sentiment subdued. Over the past few sessions, sponge iron prices had remained on the higher side despite weak demand and limited buying activity, which led to the recent correction. In the near term, prices are expected to remain range-bound, with market direction likely to depend on the recovery in downstream demand and improvement in trade activity.

Trade volumes declined sharply to around 1,600 t today from nearly 12,400 t in the previous session, reflecting subdued market participation and weak buying interest. The drop in volumes indicates cautious sentiment among buyers amid prevailing price uncertainty. On the cost front, pellet prices remained stable, with Raipur pellets assessed at around INR 10,450/t ex-works.

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%.