India: Sponge iron prices continued to decline despite rise in spot trading - 13 Feb

Sponge iron prices fell by INR 50-500/t in key locations of the country. Sponge iron prices have been fluctuating wildly, making it challenging for buyers to forecast prices. Buyers who were purchasing material on lower offers to meet their immediate needs have now adopted caution.

The downward trend in sponge iron pricing has also been influenced by a lack of optimism in the market, which has kept trade volumes limited even though offers for sponge iron are currently lower.

About 24,610 t of sponge iron transactions were recorded today in India as against 6,450 t on 11 February.

Snapshots of key markets

• Rourkela: Prices dropped slightly amid decent demand at reduced offers. A bunch of transactions were reported in the region. A significant improvement in spot trade was seen today compared to Saturday. Overall, market participants are still unclear about price movements.
  
  
• Raipur: Bulk buying was observed at lower prices. Trade volumes swelled today as limited bookings were seen over the past few days.
  
  
• Bellary: Low demand weighed on sponge iron offers today, as the market was unsupportive due to lower finished steel sales and weak demand across India. Market participants anticipate a rise in demand in the coming days.
  
  
• Durgapur: Trades were limited today with declining prices in the eastern region. This, in turn, limited spot trades amid softening offers today.
  
  
• Ramgarh: Price correction in key markets was the key reason behind low transaction volumes. Prices offered by the sellers were not accepted in the market and buyers refrained from booking at offered prices.
  
  

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%.

Click for detailed methodology

T1 - Trade, T2 - Offer/Bid/Indicative