India: Sponge iron prices continue to fall despite rise in spot trading - 21 Mar

The downtrend in sponge iron prices continues. Prices fell by INR 100-400/tonne (t) in key locations across the country. Prices of the material have been fluctuating wildly of late, making it challenging for buyers to do any forecasting. Buyers who were purchasing material at lower offers to meet their immediate needs have now adopted a cautionary approach.

The downtrend in sponge iron pricing has also been influenced by the current lack of optimism in the market. This has kept trade volumes limited even though offers for sponge iron are currently on the lower side.

However, about 26,200 t of sponge iron transactions were recorded today in India as against a lower 15,810 t on 20 March.

Snapshots of key markets

• Rourkela: Prices inched down amid decent demand at reduced offers. In fact, a bunch of transactions were reported in the region. A significant improvement in spot trading was also seen today compared to yesterday. Overall, market participants are still unclear about price movements.
  
  
• Raipur: The market saw good trade activities today, as buyers undertook bulk buying compared to the limited bookings seen in the past few days. But, buyers opted to book orders on lower offers.
  
  
• Bellary: Sponge iron prices declined due to limited demand and fewer buying enquiries were heard at lower prices. Buyers are expecting further market corrections as finished steel sales remain sluggish.
  
  
• Durgapur: Overall, the market went down initially but recovered in the second half of the trading session as positive sentiments emerged from the northern region. Spot trades improved as compared to yesterday.
  
  
• Ramgarh: Prices edged down today in this region. However, bulk bookings were done by buyers at lower offers.
  
  

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