India’s domestic steel market remained firm on September 10, with sponge iron prices seeing one of the sharper increases across the market. The rise has come as coal costs remain high and the availability of sponge iron has tightened in some major producing regions. Prices of billets, rebar and ingots also moved higher during the day, but the increase in sponge iron was more pronounced.
In Raipur, PDRI sponge iron prices increased by ₹600/tonne to ₹29,400/tonne ex-works on September 10. The increase came alongside a ₹500/tonne rise in Raipur billet prices to ₹43,000/tonne. In Bellary, PDRI sponge iron prices rose by ₹800/tonne to ₹30,300/tonne, showing a stronger move than the Raipur market.
The Bellary market was also seeing a gap between seller and buyer expectations. Sellers were quoting sponge iron at around ₹30,200–30,300/tonne, while buyers were bidding around ₹30,100–30,200/tonne. Despite the relatively narrow difference, actual business remained limited at the time of the market assessment. This indicates that higher quoted prices had not yet translated into strong trading activity across the market.
Coal availability has become an important factor behind the recent movement in sponge iron prices. As coal prices increased, imported coal briefly became more competitive against domestic coal, prompting some buyers to shift back towards domestic supplies. This has added pressure to an already tight domestic market, while monsoon-related disruptions have also affected coal movement from mines and through rail logistics.
The impact of higher raw material costs is also being seen in other parts of the domestic steel market. Mumbai rebar prices increased by ₹200/tonne to ₹50,600/tonne ex-works, while ingot prices in Mandi rose by ₹100/tonne to ₹46,600/tonne. The movement across sponge iron, billet, rebar and ingot indicates that the firm tone was not limited to a single product.
The availability of domestic coal has remained an issue for the sponge iron industry in recent months. The sector also depends heavily on imported coal, and higher international coal costs have affected the economics of production. Earlier data showed that thermal coal imports by Indian steel and sponge iron producers declined in June and July as landed costs increased, adding further pressure on domestic raw material availability.
India is the world's largest producer of sponge iron, with production spread across a large number of plants and with secondary steelmakers accounting for a major part of the demand. Sponge iron is an important metallic input for induction furnace and electric arc furnace-based steel production, particularly in India's secondary steel sector. Any sustained change in its availability or production cost therefore has a direct impact on the cost structure of these steelmakers.
The latest price movement also comes against a backdrop of stronger steel prices in the domestic market. Indian steel prices had already moved higher in recent weeks, supported by higher coking coal costs and improved demand following the monsoon period. At the same time, imports remain an important factor for domestic mills, limiting the extent to which higher production costs can be passed through to customers.
For the sponge iron market, the immediate focus remains on coal availability, domestic prices and actual buying activity. The September 10 assessment showed higher prices in both Raipur and Bellary, but the limited transactions reported in Bellary also indicate that buyers are still cautious at the higher levels. Further price movement will depend on how raw material availability and steel demand develop in the coming sessions.