India: Sponge iron prices fall tracking decline in steel prices - 20 Apr

Prices of sponge iron decreased by INR 100-400/t in some key locations today on falling steel prices. Spot trades remained weak resulting in offers softening further. Market participants seemed to lack trust in the direction of prices. However, prices in the eastern region went up by INR 50-200/t as sellers refused to lower their offers.

A total of 9,110 t of transactions were recorded today as against 8,800 t on 19 April.

Why prices fell

• Drop in billet prices: Due to the continuous decline in spot demand for semi-finished steel sponge prices dropped significantly. Low demand for sponge iron resulted from the substantial drop in billet prices.
  
  
• Fewer enquiries: Fewer purchase enquiries impacted spot trade volumes across regions, which ultimately led to a substantial decline in prices.
  
  

Rationale -

Prices have 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