Raipur- one of the major sponge producing market based in Central region of India has observed decline in sponge prices and prices have hit 1 year low on excess supply and falling raw materials (Iron ore & Pellet).
The latest deals for Sponge P-DRI (FeM 80) reported at INR 18,800-19,000/MT, C-DRI (FeM 80) at INR 20,500-20,700/MT & DR CLO (FeM 82+) grade at around INR 21,500-21,700/MT ex-plant, Raipur & excluding GST. The similar price range were last seen during mid of Dec’18.
The sources confirmed that in current circumstances the supply of sponge iron is excess in Central region specifically in Raipur as couple of integrated plants have resumed their sales in open market who’s average production is about 1,000-1,500 MT per day of each plant.
Hence the sponge proportion in merchant market increased sharply which led to selling pressure among producers and prices falling significantly.
In current week, the sponge iron prices in Raipur fell by INR 500-700/MT (USD 7-10), whereas in rest parts of the country prices corrected marginally by INR 100-300/MT.
Market expects, Indian sponge iron prices to remain under pressure due to healthy supply, falling prices of substitutes (Scrap & pig iron) globally and the key factor is assumptions of further fall in domestic Iron ore prices.
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