- Sponge Iron Market Holds Firm at Higher Levels
- Supply Tightness in Central Region Lends Support
Sponge iron prices moved up by around INR 200-700/t across major regions on 4 February. Buying activity stayed moderate through the day, as buyers showed some resistance at elevated price levels, despite demand remaining steady. Most participants adopted a wait-and-watch approach amid higher offers, while sellers continued to push prices and showed no inclination toward any significant correction, keeping the market tone supported. Market participants highlighted that sizeable bookings had already been concluded in previous sessions, and mills are presently focused on dispatching earlier confirmed orders.
Finished steel demand stayed moderate, while buying in the semi-finished segment remained selective, which influenced sponge iron offtake. Meanwhile, the central region witnessed some tightness in PDRI availability, adding support to prices. Given the current market setup, limited supply-side pressure is likely to keep prices supported with a slight upward bias, even as overall movement remains within a narrow range.
Trade volumes were recorded at around 15,200t today, compared with 21,800t in the previous session, indicating a moderation in volumes. Market participation remained moderate through the day. On the cost side, pellet prices increased by INR 200/t, with Raipur pellets assessed at INR 10,050/t ex-works, while iron ore prices remained stable, continuing to provide cost support to DRI producers.
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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