Sharp rise in Indian domestic Sponge Iron prices have compelled Bangladesh based induction furnaces to hold back purchase orders in anticipation of price correction. As per assessment, export offers for 78-80 FeM lumps in current week were recorded at around USD 365-370/MT CPT (dry port of India & Bangladesh) & USD 385-390/MT CFR Chittagong. These offers are up by about $5-10/t as compared to the previous week.
Indian exporters confirmed to have concluded deals at around USD 360-362/MT CPT & USD 380-383/MT CFR Chittagong, last week. However, fresh offers are not being accepted by Bangladesh based mills. According to trade participants, mill owners in Bangladesh have largely refrained from placing Sponge Iron purchase orders after a significant fall in local Rebar & Scrap prices, which fell almost by BDT 4,000-6,000/MT (USD 48-72) in last couple of weeks.
The producers in Bangladesh also confirmed that local steel demand had weakened considerably due to onset of monsoon rains and prices of ship recycling scrap had also fallen.
What is driving Indian sponge iron prices
Sponge iron prices in eastern region of India have increased by INR 1,500-1,700/MT (USD 23-26) in last 15 days on lower production, SteelMint learned from market sources. Sponge manufacturers have not booked Iron ore from last few weeks on anticipation that Iron ore prices should fall.
The sudden rise in prices of South African Coal is also believed to be a factor contributing to the rise in domestic Indian Sponge Iron prices.
Indian Sponge iron exports in 2017
Sponge iron (DRI) exports from India increased during calendar year 2017 and recorded at 549,072 MT as compared to 299,186 MT in 2016.
Bangladesh remained the largest buyer of Indian Sponge iron and imported about 254,663 MT (46.38%) followed by 58,892 MT(10.73%) Nepal & 52,470 MT (9.56%) Bhutan.
Bangladesh’s Sponge iron imports from India increased by 6.6% Y-o-Y in 2017. The nation’s import was about 238,404 MT in 2016 which increased to 254,663 MT in 2017.
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