- Weak finished steel demand weighs on sponge iron market
- Buyers slow down purchases after securing ample volumes earlier
Indian sponge iron prices corrected by INR 50-200/t d-o-d on 29 July 2026, amid limited buying interest and subdued spot enquiries across most regions. BigMint’s PDRI Raipur assessment declined by INR 150/t from the previous day to INR 25,350/t ex-works, reflecting weak market sentiment and restrained purchasing activity at the prevailing price levels.
Market demand remained sluggish, with procurement largely restricted to immediate requirements. Most buyers have already secured material for the current week and are waiting for further price corrections before making fresh bookings. As a result, enquiries remained limited across the market, while trading activity continued to be dominated by need-based purchases rather than bulk bookings.
On the supply side, sellers refrained from offering aggressive discounts, as many had already booked a substantial portion of their production. This balanced supply situation prevented any sharp price correction despite weak demand.
South India sentiment
In contrast to the broader market, the Bellary sponge iron market witnessed a slight improvement in sentiment this week, supported by tightening supply conditions. Several sponge iron manufacturers continued to operate their kilns at reduced capacity due to weak operating margins. Additionally, one of the region’s major merchant suppliers has remained largely absent from the merchant market over the past 30-35 days due to kiln maintenance and higher captive consumption, significantly reducing merchant sponge iron availability. Improved procurement from finished steel manufacturers, coupled with constrained supply, helped Bellary prices edge higher.
Eastern sentiment
A sponge iron manufacturer from the Durgapur region said, “We are currently facing losses of around INR 1,000/t as high raw material costs are not being adequately offset by prevailing sponge iron prices amid weak finished steel demand.”
Meanwhile, a billet manufacturer from Jharkhand stated, “Higher input costs, particularly for sponge iron and pig iron, have significantly increased our billet production costs. At the current market levels, we are incurring losses of around INR 1,000-1,500/t on billet production.”
Trade movement
Trading activity remained largely requirement-based, with BigMint recording around 11,500 t of sponge iron trades during the day, slightly higher than the previous session. Meanwhile, pellet prices remained steady at INR 10,100/t, while South African RB2 non-coking coal (5,500 NAR) held at INR 10,500/t, keeping production costs elevated and margins under pressure.
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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