India: Sponge iron prices remain firm on tight supply, higher input costs

• Prices edge up by INR 100-600/t across markets
• Moderate demand amid cautious buying sentiment

Sponge iron prices moved up by INR 100-600/t across regions on 9 February. Buying interest remained moderate during the day, supported by tight availability of PDRI in select markets, which continued to push prices higher. However, acceptance of elevated price levels was low, with buyers largely tracking further price direction and preferring to remain on the side lines. Given the prevailing market conditions and supply tightness, the scope for any meaningful correction in prices appears limited at present.

Demand in the finished and semi-finished steel segments remained slow to moderate across regions. Sponge iron manufacturers were largely focused on dispatching previously booked material, while limited availability in the spot market prevented any selling pressure. As a result, sellers remained firm on offers, and prices held steady without any notable downside pressure.

Trade volumes declined to around 12,100 t today from nearly 17,800 t in the previous session, indicating a slip in overall market activity, though trade participation remained moderate. On the cost front, pellet prices rose by INR 250/t, with Raipur pellets assessed at around INR 10,350/t ex-works. Higher input costs continued to support DRI producers and helped cap any downside pressure on sponge iron prices.

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%.