India: Sponge iron prices under pressure as steel prices soften - 20 Feb

Sponge iron prices in India fell by INR 150-650/tonne (t) in key locations today. Prices fell further as spot trades remained limited due to the continuous decline in steel prices in north India, particularly Punjab. This catapulted into a downward pressure on prices in various regions.

As a result, slight selling pressure was observed among suppliers, resulting in a consistent drop in both offers and bids. The correction in prices made market participants wary, resulting in lesser enquiries. Sources said that uncertain price movements impacted spot trade volumes.

About 12,650 t of sponge iron transactions were recorded today in India as against 9,170 t on 18 February.

Snapshots of key markets

• Rourkela: Prices trended down on lower bids followed by volatile prices in north India. Buyers were cautious and weak spot trading was observed at lower offers. Thus, prices continued to soften.
  
  
• Raipur: Limited trading activity at lower price levels came to the fore. The market remained slow and demand for semi-finished and finished steel remained subdued. In this context, sellers had to reduce prices. In addition, very limited offers were quoted by sellers due to slow market conditions.
  
  
• Bellary: Buying at higher offers were limited today due to downtrend in semi-finished and finished steel prices. Most of the buyers opted for a wait-and-watch approach.
  
  
• Durgapur: Overall, market went downwards due to negative sentiments from the northern region. Sellers reduced offers with moderate trades reported today.
  
  
• Ramgarh: Price correction in key markets was the reason behind low transaction volumes. Prices offered by the sellers were not accepted in the market and buyers refrained from booking at offered prices.
  
  

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