SteelMint’s daily sponge iron CDRI index was assessed at INR 32,400/tonne (t) (+ INR 400) exw-Rourkela on 27 December, 2022.
About 5,720 t of transactions were recorded today as against 4,650 t on 26 December.
The uptick in the index can be attributed to active demand and higher offers from suppliers. A rise in steel prices in the northern region, particularly in Punjab, has resulted in sponge iron demand recovery. This led buyers to take positions in the market, which ultimately resulted in an increase in trade volumes.
Trade dynamics
- Sponge iron PDRI (FeM 80%) prices in Raipur were assessed at INR 32,000/t (trade volume: 1,400 t) in the range of INR 31,500-32,000/t exw. Prices increased by around INR 300/t d-o-d on account of rising prices in northern region market as well as news of sponge iron plants shutting down in few regions of Rourkela due to the upcoming Men’s Hockey World Cup. Moreover the latest news of Chhattisgarh Electricity Board increasing the power rates may further impact the sponge iron prices in future. Though limited trade was seen due to high offers in the market.
- Sponge iron PDRI (FeM 80%) prices in Bellary were assessed at INR 30,400/t (trade volume: 3,500 t) exw, and CDRI at INR 31,450/t exw (trade volume: 2,500 t) today. Buying activity was moderate as compared with the previous three days, as buyers decided to take a backseat due to healthy bookings that had already been made over the past few days.
- Sponge iron PDRI (FeM 78%) prices in Durgapur were assessed at INR 30,900/t (trade volume: 8,000 t) in the range of INR 30,700-31,000/t DAP. The market remains positive on account of a price rise in the northern region.
- Sponge iron PDRI (FeM 78%) prices in Ramgarh were assessed at INR 30,200/t (trade volume: 3,700 t) exw, and CDRI at INR 32,650/t exw (trade volume: 2,500 t) today. Sellers raised offers amid improved semis movement in the local and nearby markets. Also, active demand was noticed from northern region as well as healthy bookings were seen.
Overall, the sponge iron market has been robust, with substantial transactions taking place in several areas. As a result, industry insiders anticipate that sponge iron prices will remain strong in the short term.
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 32,200-32,500/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 32,378/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 32,464/t and given a 50% weightage in the final price calculation.
The final price for sponge CDRI exw Rourkela was at INR 32,421/t, rounded to INR 32,400/t exw.
Click for detailed methodology
T1 – Trade, T2 – Offer/Bid/Indicative, *Normalized price as per methodology
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