- Strong late-evening trading activity yesterday lifts sponge iron prices
- Weak finished steel demand weighs on demand, enquiries slow down
Indian sponge iron prices rose by around INR 100-350/t d-o-d across most regions, supported by improved seller confidence following late-evening trading activity in the previous day’s market. Higher raw material costs also provided cost-push support to sellers. In Raipur, benchmark PDRI prices settled at around INR 29,050/t, remaining stable d-o-d.
Overall market sentiment remained positive today, although trading activity was relatively slow. Buyers showed limited interest at higher price levels, with enquiries remaining weak. Demand for finished steel also remained subdued, restricting support for sponge iron demand. Heavy rainfall and the ongoing monsoon season have further affected finished steel consumption and kept buyers cautious.
A sponge iron manufacturer from the Jharkhand region said that producers currently have sufficient margins, allowing some sellers to offer discounts and work at lower levels to attract buyers. However, sustaining the market at the current high price levels may be difficult, and a correction could be seen in the coming days if buying interest remains weak.
Overall, trade activity remained subdued and largely need-based, with buyers cautious at prevailing price levels. BigMint recorded trade volumes of around 10,000 t today, nearly 50% lower than yesterday, indicating softer demand and limited buying interest. Despite the positive sentiment from higher raw material costs, weak finished steel demand may restrict further price gains.
Rationale
Prices have been derived based on transactions, offers, bids, and indicative price data sets. Transactions are considered as T1 and given aweightage of 50%, whereas other data sets are considered as T2 and given a weightage of the balance 50%.
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