Indian offers for sponge iron (DRI) has increased on rising domestic prices, although no fresh deals have been reported at increased offers.
Indian sponge iron export offers to Bangladesh, which is the largest market for India, has increased by USD 10/MT this week, but no deal has been reported at these levels. Buying interest from Bangladesh based furnaces remain firm at previous week’s offers.
SteelMint’s current week price assessment for sponge exports moved up by USD 10/MT and assessed at USD 355-360/MT CPT Benapole (land port of Bangladesh and India) & USD 375-380/MT, CFR Chhittagong, Bangladesh for 80 FeM coal based sponge lumps.
“Bangladesh based mills are active in buying imported scrap, pig iron and sponge iron. But current offers of sponge iron by Indian mills are still not accepted. Buying interest stands at USD 345-350/MT CPT Benapole and USD 365/MT CFR Chittagong.” said an Indian trader based in eastern region.
Deals of around 8,000-10,000 MT sponge were reported before the offers were increased, he further added.
What is driving Indian sponge iron prices
Indian sponge iron prices have increased in last one week owing to increasing raw material prices. Notably iron ore prices have increased by about INR 200-300/MT in last one week, as well as coal prices are also trading high on rising global prices.
Current offers (equivalent to export quality) for coal based sponge iron reported at INR 22,800-23,000/MT (USD 340-343) Ex-Durgapur, East India.
India exported about 195,150 MT sponge iron in CY18 (Jan-Mar), out of which 88,892 MT was shipped to Bangladesh.
Bangladesh govt proposes to cut specific custom duty on sponge iron from 1,000 Bangladeshi Taka to 800 Taka, in recent union budget announced on 7th June 2018. This is equivalent to around USD 2.5 per tonnes, which will not make a significant change in trade.
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