Sponge Iron Price Trend and Forecast 2026-2027

Global Sponge Iron prices eased 2.0% in Q2 2026, slipping from a two-year high of USD 279.20/MT in Q1 to USD 273.70/MT, as the sharpest regional mover, India, gave back part of its earlier rally. Indian prices fell 2.9% from USD 280.00/MT in Q1 to USD 272.00/MT in Q2, even as the United States and Germany extended the steady, structural decline that's defined those markets for over a year. For H2 2026, a global average of USD 260.00-285.00/MT is expected, with India's tight mill buying likely to offset continued softness in the mature EAF markets of North America and Europe.

Sponge iron, also called direct reduced iron or DRI, is produced by reducing iron ore with a gas or coal-based reducing agent below the metal's melting point, yielding a porous, metallic pellet or lump that's cleaner and more consistent than scrap. Electric arc furnace steelmakers value it as a way to dilute the residual elements that build up in a scrap-only charge, improving yield and product quality, particularly for flat and specialty steel grades. Ductile iron pipe and casting foundries also use it as a scrap substitute where composition control matters. Iron ore and reducing-agent costs, whether natural gas or coal depending on the production route, together with EAF steel output and scrap price spreads, are the main forces behind sponge iron pricing.

Sponge Iron Price Forecast for 2026

The picture for Sponge Iron through H2 2026 looks genuinely split by region. India should stay the firmest market, with tight mill purchasing likely to persist even after the Q2 pullback, while the United States and Germany face a continuation of the slow, demand-led softening that's been building since early 2025. China, sitting in between, looks set for a broadly flat second half.

The main upside risk is a faster-than-expected recovery in Western construction and manufacturing steel demand, which would tighten the US and German markets more quickly than currently expected. The main downside risk is a renewed supply-demand imbalance in India, where production capacity has been expanding faster than domestic offtake, which could pull Indian prices lower than the forecast range allows.

For the Quarter Ending June 2026

Sponge Iron Prices Q2 2026:

• India: USD 272.00/MT
• United States: USD 285.00/MT
• Germany: USD 276.00/MT
• China: USD 266.00/MT

Sponge Iron Prices in India

Indian Sponge Iron prices averaged USD 272.00/MT in Q2 2026, down 2.9% from USD 280.00/MT in Q1. Mills that had chased tonnage hard in the first quarter eased off once production growth outpaced the immediate pickup in downstream offtake.

Why did the price of Sponge Iron change in Q2 2026 in India?

Domestic DRI capacity has kept expanding faster than downstream construction and infrastructure offtake could absorb it, and once mills worked through the tight spot conditions of Q1, that supply-demand gap reasserted itself. Not a dramatic swing, but a real one.

Sponge Iron Prices in the United States

US Sponge Iron prices averaged USD 285.00/MT in Q2 2026, the highest of any region tracked here, down 2.1% from USD 291.00/MT in Q1 as EAF producers kept procurement cautious.

Why did the price of Sponge Iron change in Q2 2026 in the United States?

Construction and manufacturing steel demand stayed soft, and EAF producers leaned on scrap wherever the spread made sense rather than committing to fresh DRI purchases. Stable domestic production kept supply ample throughout.

Sponge Iron Prices in Germany

German Sponge Iron prices averaged USD 276.00/MT in Q2 2026, down 1.4% from USD 280.00/MT in Q1, continuing a gradual decline that's now stretched across six straight quarters.

Why did the price of Sponge Iron change in Q2 2026 in Germany?

Weak construction activity across key EU economies left steel demand subdued, and DRI availability from regional producers stayed more than sufficient to cover what buying there was. Energy costs held roughly stable, removing one potential source of upward pressure.

Sponge Iron Prices in China

Chinese Sponge Iron prices averaged USD 266.00/MT in Q2 2026, down a modest 0.7% from USD 268.00/MT in Q1, holding roughly steady within a narrow band all year.

Why did the price of Sponge Iron change in Q2 2026 in China?

Operating rates at coal-based DRI facilities stayed consistent, and downstream demand from EAF and foundry buyers moved in a narrow enough range that neither side had much leverage. It was, in short, an unremarkable quarter.

For the Quarter Ending March 2026

Sponge Iron Prices Q1 2026:

• India: USD 280.00/MT
• United States: USD 291.00/MT
• Germany: USD 280.00/MT
• China: USD 268.00/MT

Sponge Iron Prices in India

Indian prices jumped 10.7% in Q1 2026 to USD 280.00/MT from USD 253.00/MT in Q4 2025, the sharpest gain of any market tracked in this report as mill purchasing turned distinctly tight.

Why did the price of Sponge Iron change in Q1 2026 in India?

Production growth had outpaced domestic offtake through most of 2025, but that imbalance flipped abruptly as infrastructure and construction-linked steel demand accelerated into the new year. Mills that had been comfortably stocked suddenly found themselves competing for prompt tonnage, and prices moved fast in response.

Sponge Iron Prices in the United States

US prices slipped a further 1.7% in Q1 2026 to USD 291.00/MT from USD 296.00/MT in Q4 2025, extending a decline now running for five consecutive quarters.

Why did the price of Sponge Iron change in Q1 2026 in the United States?

Cautious procurement from EAF steelmakers continued as construction and manufacturing demand showed no real sign of a turnaround. With scrap remaining a competitive alternative feedstock, there was little reason for DRI producers to hold firm on price.

Sponge Iron Prices in Germany

German prices eased 1.8% in Q1 2026 to USD 280.00/MT from USD 285.00/MT in Q4 2025, continuing the same slow drift lower that's held since early 2025.

Why did the price of Sponge Iron change in Q1 2026 in Germany?

Slow industrial recovery across the EU kept steel consumption muted, and DRI producers, facing ample availability, had to concede further ground to keep volumes moving. Nothing about this quarter broke from the pattern already well established.

Sponge Iron Prices in China

Chinese prices firmed 2.3% in Q1 2026 to USD 268.00/MT from USD 262.00/MT in Q4 2025, a modest gain in an otherwise steady market.

Why did the price of Sponge Iron change in Q1 2026 in China?

A seasonal uptick in downstream steel output nudged demand higher just enough to firm prices modestly, though stable production growth from domestic DRI facilities kept any gain well contained.

Quarterly Sponge Iron Price Trends

Global Sponge Iron prices dipped through the first half of 2025 before rebuilding steadily into a Q1 2026 peak, led almost entirely by India's sharp swing from oversupply to tight mill buying, and have since eased modestly as that spike partially unwound.

What was Sponge Iron Price in 2025?

Sponge Iron told two very different stories across 2025 depending on the region. India spent much of the year working through an oversupply hangover before turning sharply tighter toward year-end, while the United States and Germany settled into a slow, steady decline as Western steel demand stayed soft throughout.

Sponge Iron Prices in India in 2025

Indian prices actually fell from about USD 235.00/MT in Q1 2025 to a low near USD 228.00/MT by Q2, before recovering to USD 253.00/MT by Q4, a net gain of roughly 7.7% across the year. Production growth outran demand for much of the period, but a late-year infrastructure push reversed that imbalance.

Sponge Iron Prices in the United States in 2025

US prices declined from about USD 310.00/MT in Q1 2025 to USD 296.00/MT by Q4, down roughly 4.5%. Persistently weak construction and manufacturing demand, paired with a competitive scrap alternative, kept this market on a consistent downward path all year.

Sponge Iron Prices in Germany in 2025

German prices fell from about USD 298.00/MT in Q1 2025 to USD 285.00/MT by Q4, down roughly 4.4%. Muted steel consumption across the EU left DRI producers with little pricing power throughout 2025.

Sponge Iron Prices in China in 2025

Chinese prices held nearly flat, easing from about USD 265.00/MT in Q1 2025 to USD 262.00/MT by Q4, essentially unchanged at around -1.1% for the year, as stable production and steady demand kept this market notably calm.

How We Can Help

Expert Market Research: Your Source for Real-Time Sponge Iron Price Intelligence

Expert Market Research tracks Sponge Iron prices continuously across every major producing and consuming region, combining DRI plant utilization data, EAF steel output, and scrap price spreads into a single, regularly updated view of the market. Our team can help your procurement function benchmark current offers, plan tonnage purchases around the diverging regional patterns covered in this report, and build a defensible view of where this feedstock is headed next. Reach out to our team for a tailored briefing or a deeper look at any of the regional markets covered here.