SteelMint’s daily sponge iron, CDRI index, was assessed at INR 31,050/tonne (t) (- INR 200) exw-Rourkela on 20 December, 2022.
About 1,000 t of transactions were recorded today as against 1,800 t on 19 December.
The Rourkela sponge iron index fell on account of limited trades as buyers are engaged in need-based procurement to fulfil their immediate requirements. Most importantly, spot buying interest was weak today, eventually leading to a decrease in the index.
Uncertain price movement was another key factor that contributed to the dull trade volumes. Market participants are closely watching the movement of prices, as they are waiting for them to stabilise.
It may be noted here that the demand for sponge iron is largely driven by the demand for steel, which is a key construction material. Hence, a slowdown in demand for steel, in turn, impacts the demand for sponge iron.
Overall, market participants are waiting for prices to stabilise as they closely monitor the movement of the index.
About 500 t of sponge iron PDRI (FeM 78-79%) trade was recorded from Odisha today. Deals were concluded on DAP Raipur.
Rationale –
This index has 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%.
- Transactions (T1) – Three trades in the range of INR 31,000-31,100/t was recorded during the 11:30 am to 5:30 pm SteelMint trading window and considered for final price calculation as T1 inputs. The average of these transactions was INR 31,025/t which is given a 50% weightage in the final price calculation.
- Other Price Indicators – bids/offers/indicative (T2) – Seventeen offers reported in the trading window and considered as T2 inputs. The average price of these seventeen was INR 31,079/t and given a 50% weightage in the final price calculation.
The final price for sponge CDRI exw Rourkela was at INR 31,052/t, rounded to INR 31,050/t exw.
Click for detailed methodology
T1 – Trade, T2 – Offer/Bid/Indicative, *Normalized price as per methodology
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