India: Sponge iron prices rise INR 200-500/t on optimistic market trends - 2 Jan

Daily sponge iron prices in India rose by INR 200-500/t due to optimism in the market. Producers kept prices strong as several deals took place triggering the rise in prices today, sources informed, following improved buying on account of a surge in steel prices in the northern region, especially Punjab. Considering these factors, buyers started to take positions. This, in turn, led to gains in spot trade volumes across regions.

About 30,465 t of sponge iron transactions were recorded today in India.

Trade dynamics

• Sponge iron CDRI (FeM 80%) prices in Rourkela were assessed at INR 32,950/t exw. About 3,200 t of sponge iron PDRI (FeM 77-78%) trade was recorded from Odisha today. Deals were concluded on DAP Raipur basis.
  
  
• Sponge iron PDRI (FeM 80%) prices in Raipur were assessed at INR 32,600/t. There is price acceptance at higher levels in the market owing to strong buying and higher prices of semi-finished steel. Also, firm prices in the northern region contributed to the upward price movement in Raipur as demand for sponge iron seemed to remain strong.
  
  
• Sponge iron PDRI (FeM 80%) prices in Bellary were assessed at INR 31,000/t exw, and CDRI prices stood at INR 32,500/t exw. Spot demand in the market for sponge iron remains robust, despite the fact that buying activity today was moderate due to numerous participants being on vacation; yet, the overall market remained strong.
  
  
• Sponge iron PDRI (FeM 78%) prices in Durgapur were assessed at INR 32,200/t DAP.
  
  
• Sponge iron PDRI (FeM 78%) prices in Ramgarh were assessed by SteelMint at INR 31,000/t exw, and CDRI at INR 33,500/t exw.
  
  

Overall, the price of sponge iron has increased as a result of rising finished steel and billet prices. As long as there is significant demand for steel and raw materials, this trend is anticipated to continue.

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