Sponge iron prices in Indian domestic market have fluctuated by INR 100-300/MT since a week, although it fell today in same proportion. As per participants prices are likely to remain under pressure in line with healthier supply, low demand for domestic & exports and with anticipations of further fall in raw materials.
SteelMint learned that the inventories with the sponge producers are maintained on average basis, although future deliveries are going to be completed. If the current situation (low demand) continues the producers may be forced to keep their prices on lower side.
In addition the prices of key ingredient – Pellets & Iron have remained on down trend and corrected close to INR 1,000/MT (USD 14) M-o-M, in eastern India. South African coal prices fell by USD 2-3/MT W-o-W & about USD 5/MT M-o-M.
Meanwhile, the exports of sponge iron remains weak due to low cost imported scrap. Recent, the small deals for Bangladesh reported at reduced prices by USD 5/MT (W-o-W), meanwhile the buying interest through the bulk buyers reported further at lessened prices.
SteelMint latest price assessment for coal based sponge (78-80 FeM) C-DRI price stood at INR 19,100-20,000/MT (USD 282-297) ex-plant & excluding GST for domestic buyers. And for exports the prices hovering at USD 335-340/MT CFR Chittagong, Bangladesh.
Central India: Raipur based producers have reduced prices by around INR 200-300/MT in last couple of days and offers for P-DRI are assessed in the range of INR 18,300-18,500/MT, C-DRI at INR 19,900-20,100/MT and DR-CLO at INR 20,900-21,100/MT, excluding GST.
Eastern India: Durgapur & Rourkela where mill owners earlier reported that they are having good bookings in hand and are more active to complete dispatches & indicated offers may remain on same line or gradually decline as trends are not much positive. In addition few have stated logistic issues for western region – Maharashtra, this may lead to stock pile up. However, presently the manufacturers are in wait & watch mode, hoping for stability in market.
Current offers for C-DRI are assessed at INR 19,200-19,400/MT ex-Rourkela and INR 19,900-20,000/MT ex-Durgapur. Moreover, P-DRI prices are evaluated at around INR 18,000/MT ex-Jharsuguda and INR 18,700-18,800/MT ex-Durgapur.
Southern region: in Bellary at present offers for 80 FeM P-DRI is hovering at INR 18,600-18,800/MT, while same grade C-DRI is trading at INR 19,100-19,300/MT, ex-plant.
A Bellary based Sponge manufacturer stated, “they will prefer to hold stock rather than to sell material at par value(reduced prices). As of now we are looking for raw pellet offers down by INR 300-400/MT than current offers which are at INR 6,800-6,900/MT ex-Bellary”, he added.
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