Weak Demand Pressures Sponge Iron Prices Amid Muted Steel Market

India’s sponge iron market saw a day-on-day price decline of INR 100-300 per tonne (t) due to weak demand and cautious buyer sentiment. Persistently subdued activity in the finished steel segment further weighed on prices despite sellers offering discounts to stimulate transactions.

On 25 November, South African RB2 coal prices remained stable at INR 9,500/t ($112/t) exw-Gangavaram for 5500 NAR non-coking coal. However, the market for sponge iron remained under pressure as limited deals were concluded.

The PDRI market concluded with prices ranging from INR 23,800 to INR 26,400/t, while CDRI offers were assessed at INR 26,200 to INR 31,200/t. Regions such as Bellary and Durgapur recorded price drops of INR 150-250 per tonne, reflecting demand softness.

In terms of transactions, only 5,700 tonnes of sponge iron were traded, a significant drop from 6,950 tonnes on 22 November. The regions of Raigarh and Raipur contributed the highest trading volumes, recording 2,000 tonnes and 1,600 tonnes, respectively, as per indicative bids and offers. Durgapur, however, witnessed a decline in trade activity with only 1,400 tonnes transacted, marking a drop of 1,350 tonnes d-o-d.

The price trends were calculated using a weighted average methodology, with actual transactions (T1) given a 50% weightage and other market indicators (T2) forming the balance.

As the market struggles with cautious buyer behavior and weak demand, stakeholders in the sponge iron industry are closely watching for recovery signals in the finished steel segment.