Prices of sponge iron decreased by INR 150-300/t in key locations today on falling steel prices. Spot trades remained just about moderate resulting in offers softening further. Market participants seemed to lack trust in the direction of prices. Despite the price reduction, buyers are still acquiring material to meet immediate requirements.
A total of 9,170 t of transactions were recorded today as against 29,300 t on 27 March.
Reasons behind drop in prices
- Due to continuous decline in spot demand for semi-finished steel sponge prices dropped significantly. Low demand for sponge iron resulted from the substantial drop in billet prices.
- Fewer purchase enquiries impacted spot trade volumes across regions, which ultimately led to a substantial decline in prices.
Snapshots of key markets
- Rourkela: Spot trades continued to be on the lower side, with buyers booking material for immediate use at lower prices. Spot trades fell drastically by 49% d-o-d.
- Raipur: Sponge iron trade volumes fell in Raipur due to weak demand. Although most sellers kept their offers firm, no major buying activity was been seen. This could be because many participants were busy with their year-end closing activities.
- Bellary: Sponge prices remained firm on modest buying activity. Raw material availability is good in the market. Market participants are anticipating sponge iron prices to rise post financial year closing.
- Durgapur: Bearish sentiments in north India created pressure on suppliers to reduce offers. Spot trades were also moderate as no major bookings were heard. Buyers remained cautious about uncertain price movements and are waiting for prices to stabilise.
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%.
Click for detailed methodology
T1 – Trade, T2 – Offer/Bid/Indicative
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