Sponge iron prices in India’s 2nd largest producing state hits 4 months high
Sponge offers in Raipur Chattisgarh (India), which is eventually second largest state in terms of installed capacity and largest merchant seller of sponge iron, has reached 4 month’s high on improved demand and low production levels.Higher prices of substitute products are also lending support to prices. These levels were last seen in August 2017.
SteelMint’s price assessment for pellet based sponge iron (P-DRI) is recorded at INR INR 17,800-18,000/MT (USD 275-279). Sponge made from NMDC’s high grade iron ore lumps (DR-CLO) are hovering at INR 19,500-19,700/MT (USD 302-305). Both prices are on ex-plant basis & excluding 18% GST.
Sponge makers attribute this hike to falling supply of iron ore from Odisha and NMDC and higher coal prices. “We have sold decent quantities at INR 17,800-17,900/MT and have raised our offers to INR 18,000/MT”, said a manufacturer in Raipur, Chattisgarh.
Factors supporting sponge iron prices
1. Limited supply of rakes from Indian railway which has disrupted the supply of iron ore and coal. Most of the plants in this region are running low on coal and iron ore inventories.
2. Demand from other states: With consistently rising imported scrap prices, induction furnaces, which were dependent on imported scrap have started sourcing sponge iron from this region
3. Pig iron and scrap prices have also increased in last few days on falling supplies
Sponge iron prices in other part of the country may also follow suit, but experts believe that this increase may be momentary and ease in supply of rakes may again put pressure on prices.
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