India: Sponge prices fall 14% in Nov on falling raw material, substitutes prices

Sponge iron prices in India continued their downward trajectory in Nov'21. Prices across all the key markets dropped by up to 14% m-o-m last month.

The continuous fall in sponge iron prices is attributed to falling raw material prices (iron ore, pellets and coal) along with lowering scrap prices in the month under review.

• SteelMint's Odisha iron ore Fe 62% fines index fell by around INR 900/tonne (t) m-o-m to INR 5,200/t ex-mines, including royalty, DMF and NMET.
  
  
• SteelMint's bi-weekly pellets index, PELLEX, dropped by around INR 2,750/t m-o-m to INR 10,350/t DAP Raipur.
  
  
• South African RB2 coal portside prices were recorded at INR 10,000/t ex-Gangavaram, falling sharply by around INR 3,500/t m-o-m, as per CoalMint's assessment.
  
  
• SteelMint's assessment for HMS (80:20) scrap was recorded at INR 35,600/t DAP-Mumbai, a drop of INR 1,300/t m-o-m.
  
  

In addition, weak demand in the domestic market continued to keep sponge iron prices under pressure.

Prices and deals in major markets

• Raipur: SteelMint's assessment for sponge P-DRI in Raipur, Chhattisgarh was recorded at INR 28,900/t exw in Nov'21, down INR 3,800/t m-o-m. Prices throughout the month remained on the lower side.
  
  

A total of 61,800 t of confirmed sponge P-DRI deals were recorded last month, as per SteelMint.

• Bellary: Bellary is one of the key trading markets of sponge iron (P-DRI and C-DRI). P-DRI prices in Bellary, Karnataka were assessed at INR 28,700/t exw while C-DRI prices were recorded at INR 30,200/t exw in November.
  
  

SteelMint recorded total confirmed deals of 58,525 t of C-DRI and 36,600 t of P-DRI last month.

• Rourkela: Sponge iron (C-DRI) prices in Rourkela, Odisha dropped by INR 4,000/t m-o-m to INR 30,500/t exw last month, as per SteelMint's assessment.
  
  

A total of 60,900 t of confirmed C-DRI deals were recorded by SteelMint last month.

Outlook

SteelMint expects that Indian sponge iron prices are likely to remain volatile owing to factors like lacklustre demand, slightly tight supply and resumption in exports of raw material, ie, pellets.