India: Sponge iron prices rally on increased buying - 16 Aug

India's sponge iron market has witnessed a significant price rally, with hikes ranging between INR 100-550/t across primary locations. This surge has been attributed to a robust momentum in spot trading paired with heightened buying interest.

One of the primary driving forces behind this uptick is buyers' anticipation of a further price escalation. This sentiment has been fuelled in part by the Odisha Mining Corporation's (OMC)'s recent decision to auction 3 million tonnes (mnt) of iron ore on 18 August 2023. The upcoming auction, slated to offer 2.4 mnt of fines and 0.6 mnt of lumps, has registered an increased base price for lumps by a notable INR 900/t. This is in comparison to the auction OMC held on 20 July 2023.

Interestingly enough, transaction volumes soared to 36,050 t compared to 22,205 t recorded on 14 August.

According to sources familiar with the situation, the price increase can also be ascribed to the strong performance of the semi-finished and finished steel markets. Furthermore, billet prices increased by INR 300-600/t across key areas.

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