Sponge iron prices in Raipur rise further to hit 3 years high owing to recent hike in iron ore prices by some major miners.
SteelMint’s price assessment for pellet based sponge iron (P-DRI) is recorded at INR INR 18,500-18,700/MT (USD 285-288). Sponge made from NMDC’s high grade iron ore lumps (DR-CLO) are hovering at INR 20,000-20,200/MT (USD 310-313). This level was last seen during December 2014. Both prices are on ex-plant basis & excluding 18% GST.
Raipur is a key market for sponge iron in India and has an annual production capacity of around 9 MnT which is about 20% of India’s total capacity. Raipur is also on of the largest producer of merchant sponge iron in the country.
Key factors driving prices:
1. Sponge iron production has dropped owing to logistical issues. SteelMint learned that supply of railway wagon has been very poor in last few weeks, which has resulted a sharp fall in dispatch of iron ore and coal.
2. Recently, India’s largest iron ore producer – National Mineral Development Corporation (NMDC, Chhattisgarh) has increased iron ore prices up to 13% (INR 300) for Dec’17 deliveries. Also, Odisha based major merchant miners have increased prices by INR 200-400/MT.
3. Strong demand from other states owing to higher prices of key substitute products like – Scrap & Pig iron, which increased by INR 500-1,000/MT (USD 23-32) in last couple weeks.
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