India: Sponge iron prices rise by INR 100-200/t d-o-d but demand slows

• Adequate bookings last week prompt sellers to test higher offers
• Absence of bulk buying weighs on trade volumes

The Indian sponge iron market witnessed a sluggish trading session today, though prices in key regions rose marginally by INR 100-200/t d-o-d. The increase in offer prices was primarily driven by adequate bookings reported last week, prompting sellers to test higher levels. However, buyers showed little interest at the revised offers, resulting in limited deal conversions and a subdued market sentiment. Demand from the finished steel segment remained subdued, with limited buying inquiries reported across key consuming regions. Weak procurement by finished steel manufacturers kept sponge iron demand under pressure, prompting buyers to resist higher offer prices.

Buying activity remained moderate to weak throughout the day. Bulk procurement was largely absent, as most buyers restricted purchases to immediate requirements, keeping overall trading volumes under pressure.

Raw material 

Raipur pellet prices were reported at around INR 9,550/t. In the imported coal market, South African RB2 (5,500 NAR) prices remained stable at around $106/t CNF Gangavaram, while domestic non-coking coal prices at Visakhapatnam port were also steady at approximately INR 10,400/t d-o-d.

Trade volume

Need-based procurement continued to dominate the market, with no major bulk deals reported. BigMint recorded sponge iron trade volume of around 10,100 t, sharply lower than 36,800 t recorded in the previous trading session.

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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