India: Sponge iron prices up marginally in August even as trade volumes drop

Sponge iron prices across key markets remained volatile in August. However, the monthly average prices went up marginally compared to July, as per SteelMint assessment.

The market was sluggish as buying interest remained slightly on the lower side amid dull steel demand due to the monsoon season. However, supply was limited with mills lowering their operating rates. This lent support to sponge iron prices last month.

Prices across key markets-

• Raipur: Pellet-based sponge iron (PDRI) prices stood at INR 34,598/tonne (t), up INR 550/t m-o-m.
  
  

Confirmed deals of around 91,400 t were recorded in the month under review, down 6% m-o-m.

• Rourkela: Iron ore lumps-based DRI (CDRI) prices were at INR 36,190/t, up INR 840/t compared to July.
  
  

Around 71,350 t deals were concluded, down 28% m-o-m.

• Bellary: Pellet-based sponge iron (PDRI) prices were assessed at INR 34,330/t, mostly stable m-o-m.
  
  

SteelMint recorded around 79,590 t of P-DRI deals, up 4% m-o-m and around 53,340 t of C-DRI deals, down 15% m-o-m.

The fall in trade volumes was attributed to high offers, weak steel sentiments and slow market activity amid festive holidays.

Outlook

With the monsoon season coming to an end, demand for the raw material will pick up, while the supply side may also see an improvement with increase in production. Thus, it is expected that sponge iron prices may continue to remain volatile in the coming month.