SteelMint’s daily sponge iron, CDRI index, was assessed at INR 31,400/tonne (t) (+ INR 600) exw-Rourkela on 23 December, 2022.
About 4,605 t of transactions were recorded today as against 2,300 t on 22 December.
The index saw a rise in prices as producers have quoted higher prices on an active demand. This increase is believed to be due to a sharp rise in the prices of billets. The increase in billets prices has resulted in strong demand for sponge iron, leading to an active spot trade throughout the day.
Going forward, the movement of sponge iron prices is expected to be largely dependent on the prices of billets. However, there are also concerns about the availability of sponge iron in the spot market due to a decision by the State Pollution Control Board (SPCB) in Odisha to shut down 22 sponge iron plants in the Kuarmunda and Kalunga regions for the month of January 2023. This shutdown is being implemented in order to maintain a good air quality in Rourkela during the upcoming Men’s Hockey World Cup.
It is important to note here that the availability of sponge iron could be impacted by this shutdown, which could potentially lead to further price rises.
Overall, it appears that the Rourkela sponge iron index saw a rise in prices due to a strong demand driven by higher billets prices, but the availability of sponge iron may be a concern going forward.
About 1,100 t of sponge iron PDRI (FeM 77-78%) trade was recorded from Odisha today as against 800 t from yesterday. 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) – Eleven trades in the range of INR 30,800-31,500/t were recorded during the 11:30 am to 5:30 pm SteelMint’s trading window and considered for final price calculation as T1 inputs. The average of these transactions was INR 31,455/t which is given a 50% weightage in the final price calculation.
- Other Price Indicators – bids/offers/indicative (T2) – Twelve offers reported in the trading window and considered as T2 inputs. The average price of these twelve was INR 31,367/t and given a 50% weightage in the final price calculation.
The final price for sponge CDRI exw-Rourkela was at INR 31,411/t, rounded to INR 31,400/t exw.
Click for detailed methodology
T1 – Trade, T2 – Offer/Bid/Indicative, *Normalized price as per methodology
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