India: Sponge iron prices show mixed trends amid price fluctuations - 20 Jan

Today's Indian sponge iron prices showed mixed trends, with a further drop in prices reported in the eastern regions. Meanwhile, prices in the central and southern regions saw a marginal rise as manufacturers resisted further price cuts due to higher raw material costs.

The prices fell because spot trades remained limited as a result of poor finished steel sales and a consistent drop in steel prices in north India, particularly Punjab. This resulted in a downward price trend in various regions. Continued weak demand as a result of poor steel product offtake has resulted in slight selling pressure among suppliers, resulting in a consistent drop in offers and bids.

Price corrections are making market participants wary, resulting in fewer enquiries. SteelMint has learned from sources that the uncertain price movements have impacted spot trade volumes.

About 20,710 t of sponge iron transactions were recorded today in India as against 25,800 t on 19 January.

Snapshots of key markets

• Rourkela: The prices trended down on account of lower bids followed by volatile prices in north India. This kept buyers cautious and they procured material as per immediate necessity and on lower offers. Thus, prices continued to soften. Further, there is a lack of confidence in the market about a rebound in offers soon and this kept trades limited despite lower offers.
  
  
• Raipur: Moderate trading was observed at higher offers as compared to yesterday. The offers quoted in the market were at the higher side. Limited buying activity was witnessed at higher prices as buyers are anticipating less prices. There was a marginal increase in the prices and low acceptance. Sponge iron prices further increased by INR 100/t today but the market was slow owing to falling northern region market and substantial buying by buyers in past few days.
  
  
• Bellary: The market's volatility remained strong, which has spurred buying activity in sponge iron d-o-d, resulting a rise in trade volume. According to sources, the market will continue to be turbulent in the coming days.
  
  
• Durgapur: Spot trades were limited today as buyers waiting for prices to be more on the lower side. Sellers are under pressure as rising raw material prices did not leave much space for lowering offers right now.
  
  
• Ramgarh: Market remained rangebound today however smelter mill owners are not ready to reduce offers. Buying seemed active after a gap but in small packages.
  
  

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