India: Sponge Iron prices rise despite weak buying

• Firm prices despite soft buying
• Supply tightness keeps market supported

Sponge iron prices increased by INR 100-600/t, mainly in the central and southern regions, while the eastern market witnessed a mild correction of around INR 100/t. Buying activity remained slow during the day as rising prices faced weak acceptance in the market, with participants reluctant to transact at elevated levels.

Demand in the finished and semi-finished steel segments remained slow to moderate across regions, except in the eastern market, where some movement was observed in semi-finished demand. Sponge iron manufacturers continued to focus on dispatching previously booked material, while limited availability in the spot market restricted any selling pressure. Consequently, sellers maintained firm offers, keeping prices largely unchanged with no notable downside pressure.

Trade volumes declined to around 9,300 t today from nearly 12,100 t in the previous session, reflecting softer market activity, although participation remained moderate. On the cost front, pellet prices remained stable, with Raipur pellets assessed at around INR 10,350/t ex-works. Elevated input costs continued to support DRI producers and capped 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%.