- Trade volumes drop sharply as buyers stay on side-lines
- Finished, semi-finished steel markets see muted demand
Sponge iron prices witnessed a mixed trend on 5th February, with stability in the central region, a marginal decline of around INR 100/t in the eastern markets, while the southern region recorded an uptick of INR 200-300/t. Market sentiment remained subdued, with limited participation observed during the day. Buying activity was low, as most buyers stayed on the side-lines and monitored price movements in anticipation of some adjustment in offers.
Over the past few sessions, procurement had been steady, resulting in near-term requirements being largely covered. Mills, meanwhile, are not facing selling pressure and are maintaining current prices, with a greater focus on dispatching previously booked material.
Finished and semi-finished steel segments witnessed subdued demand today, which in turn weighed on sponge iron offtake. Market participation remained limited, with buyers adopting a cautious stance amid muted trade activity. However, supply conditions remained comfortable, and sellers did not show urgency to liquidate stocks, helping prices hold near current levels. Under the present market scenario, prices are expected to remain at around current levels, with limited downside risk despite the dull demand environment.
Trade volumes dropped sharply to around 3,600 t today from nearly 15,200t in the previous session, reflecting a significant slowdown in market activity. On the cost front, pellet prices moved up by INR 200/t, with Raipur pellets assessed at around INR 10,050/t ex-works, which continued to support to DRI producers and helped limit 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%.
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