SteelMint: Rourkela sponge iron index rises on higher raw material prices - 17 Jan

SteelMint's daily sponge iron, CDRI, index is assessed at INR 34,200/tonne (t) (+650) exw Rourkela on 17 Jan'22.

About 3,700 t of transactions in CDRI were recorded by SteelMint today against 1,400 t on 15 Jan.

The index rose on account of a surge in prices of raw materials (iron ore) in OMC's latest auction. The market remained steady with active trading taking place today.

A bunch of deals were reportedly concluded for West Bengal, with freight charges at around INR 1,500-1,600/t, SteelMint learnt from sources.

The current price of iron ore-based DRI (CDRI) for FeM 78% material in Durgapur is at INR 36,200/t DAP, while Odisha (Rourkela) sponge iron is calculated at around INR 35,700-35,800/t DAP Durgapur for FeM 79-80% material.

With major deals happening in different states, ultimately trades and prices have picked up today.

Sources are expecting sponge iron prices to remain strong on rising raw material 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%.

• Transactions (T1) - Eight trades were recorded in the 11:30 am to 5:30 pm SteelMint trading window and considered for final price calculation as T1 inputs. Out of these three trades were recorded at INR 34,200/t, two deals at INR 34,000/t, and one deal each at INR 34,500/t, 34,400/t and INR 34,300/t. The average price of these eight transactions was INR 34,253/t and given a 50% weightage in the final price calculation.
  
  
• Other Price Indicators - bids/offers/indicative (T2) - Fifteen offers were reported in this trading window and considered as T2 inputs. The average price of these fifteen was INR 34,180/t and given a 50% weightage in the final price calculation.
  
  

The final price for sponge CDRI exw Rourkela was at INR 34,217/t, rounded to INR 34,200/t exw.

Click for detailed methodology

T1 - Trade, T2 - Offer/Bid/Indicative, *Normalized price as per methodology