India: Sponge iron prices rise INR 150-600/t d-o-d on higher coal costs

• Cautious buyers limit bookings at elevated price levels
• Firmer finished steel prices support higher sponge iron offers

Domestic sponge iron prices increased by around INR 150-600/t across key regions, supported by higher input costs following yesterday’s late-evening Eastern Coalfields Limited (ECL) coal auction. In Raipur, P-DRI prices rose by INR 400/t d-o-d to INR 29,550/t.

The ECL auction witnessed significantly higher premiums as limited availability of domestic non-coking coal and elevated imported coal costs increased procurement costs for sponge iron producers. This prompted producers, particularly in the eastern and central regions, to raise offers.

However, buyer participation remained cautious at the higher price levels. While enquiries were healthy, most buyers were seeking lower prices, resulting in limited conversions and largely need-based bookings. Firmer finished steel prices provided some support to sentiment, although weak demand continued to keep buyers cautious. BigMint recorded around 9,700 t of sponge iron trades, up from 7,000 t a day earlier.

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%.