India: Sponge iron prices continue to decline on limited spot trading - 20 Mar

Indian sponge iron prices declined in the range of INR 100-600/t in key locations on 20 March, 2023. Prices have been fluctuating widely making it difficult for buyers to predict. This has instilled caution among buyers who are procuring material only as per their immediate requirements and after considerable bargaining.

The downward trend in sponge iron prices has been trigerred by the lack of optimism in the market. Many traders are hesitant about inking deals because they do not believe prices will bounce back soon. This has kept trade volumes limited, even though offers for sponge iron are currently low. Overall, prices may continue to soften in the short term.

About 15,810 t of sponge iron deals were recorded today in India as against 5,210 t on 18 March, as per SteelMint assessment.

Snapshots of key markets

• Rourkela: Sponge iron prices trended down due to a combination of factors. One reason was the lower bids received which made it difficult for sellers to find buyers willing to pay the price. Another factor was volatile steel prices in the north Indian market.
  
  
• Raipur: Moderate booking was observed as prices dropped. The market continued to remain bearish and limited trading activity was seen, as buyers remained hesitant about booking material at higher offers.
  
  
• Bellary: Sponge iron demand remained sluggish and many sellers chose not to float offers amid the downtrend in prices and slow buying activity. Sellers are anticipating that sponge iron prices will stabilise in the coming days as raw material prices remain robust.
  
  
• Durgapur: Sellers reduced offers on account of negative price trends across the country. Spot trades were moderate as buyers were on wait-and-watch mode and no bulk bookings were heard.
  
  
• Ramgarh: Spot trades volumes were low today, as buyers remained silent. Prices dropped amid correction in steel prices in north India.
  
  

Rationale -

This index has been derived based on transactions, offers, bids and an 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