India: Sponge iron prices rebound on active spot trading - 11 Jan

Sponge iron prices in India rose in the range of INR 100-750/t in key locations owing to active demand and higher offers quoted by the suppliers. Producers kept prices on the higher side as several deals took place today following the rise in billets prices by INR 400-550/t d-o-d. Against this positive backdrop, buyers have started taking positions which resulted in a rise in trade volumes today.

About 38,900 t of sponge iron transactions were recorded today in India as against 22,300 t on 10 January.

Snapshots of key markets

• Rourkela: Active demand and price recovery in the northern region, especially Punjab, led to an increase in sponge prices. Demand was modest in the first half but increased in the late trading hours which resulted in a spike in offers. Market participants are anticipating sponge prices to stay strong in the near term amidst the recent temporary shutdown of several plants which might trigger supply concerns in the spot market.
  
  
• Raipur: Active buying was seen at higher price levels. Prices improved on good movement in semis and finished steel backed by the upward price momentum in north India.
  
  
• Bellary: Spot buying activity increased today due to an increase in offers by sponge manufacturers, which was backed by a rising trend in the semi-finished steel market. Hence healthy sponge bookings were concluded.
  
  
• Durgapur: Firm buying interest following a slight improvement in demand resulted in a rise in prices. In addition, a significant increase in offers in Punjab, north India, influenced suppliers to keep offers higher.
  
  
• Ramgarh: The semi-finished steel market witnessed a slight rise in offers which resulted in an increase in sponge prices. However, trades were moderate throughout the day as buyers remained cautious about bulk bookings.
  
  

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