Sponge Iron (DRI) prices in Indian spot market remained more or less stable as compared to last week. Current offers are pertaining in the range of Rs 18,000/MT-20,000/MT (US$ 290-320/MT)
Indian sponge iron prices are trading at almost similar levels as last week. However with restricted supply of iron ore from Odisha & Karnataka, followed by low imports of ferrous scrap, it looked that sponge iron prices might go up soon. But sources say that with falling margins, quite a lot of induction furnaces across India have hold their production, which in turn reduced the demand of sponge iron.
“Indian sponge iron industry is not in a good shape. Raw material crisis, rising power prices and shutting down of induction furnaces in India have weighed upon the margins and demand. Though looking at lower imports of scrap and rising interest in exports of iron pellets by Indian manufacturers, sponge iron prices should find support at these levels.” said a senior executive with one of the sponge iron unit based in eastern region of India.
Current offers are in the range of INR 18,000/MT to 20,000/MT (Ex-Works Basis), he further added.
Indian Sponge Iron Prices (in INR/MT)
| Particular | Grade | Price (Basic) | Change | W-O-W | M-O-M |
| Rourkela | 78-80 FeM | 18,200 | – 50 | + 150 | – 350 | ||
| Durgapur | 78-80 FeM | 19,400 | 0 | – 300 | – 1,000 | ||
| Raipur | 80 FeM | 20,100 | + 100 | + 400 | – 600 | ||
| Raigarh | 79-80 FeM | 19,450 | 0 | + 50 | – 850 | ||
| Bellary | 75 FeM | 18,000 | 0 | 0 | – 1,000 | ||
Excluding Excise duty @12.36% , VAT as applicable.
Sponge Iron Units in Karnataka Face Iron Ore Crisis
Sponge iron situation looks very similar in southern and western region of India. Prices have been stable but raw material crisis has hit the industry. Sources close to the industry, mention that sponge iron units in Karnataka are not even operating at 50% capacity, state contributes over 12% of total sponge iron installed capacity in India.
“Prime concern for sponge iron units in Karnataka is expensive iron ore lumps offered y NMDC through E-auction. Which is not affordable by small and mid sized plants. Current prices in Bellary (Karnataka) for Sponge Iron of grade FeM 75 is at around INR 18,000/MT (US $290) and Sponge pellet of grade FeM 77 is at around INR 17,400/MT (US $280) on Ex-works basis.“ said a sponge iron manufacturer based in Karnataka.
While Supreme Court asked to auction 11.48 million tonnes of iron ore from Goa, state which is under complete ban since September 2012, will not give much relief to sponge iron manufactures as iron ore available in Goa is of very low grade and can not be used for steel making in general.
Top Sponge Iron Producers in India (2012-2013)
| Producer | Installed Capacity | Production in (2012-2013)* |
| Essar Steel | 6.8 Million Tonnes | Not Known |
| Jindal Steel and Power | 1.37 Million Tonnes | 1.32 Million Tonnes |
| JSW Ispat | 1.6 Million Tonnes | 1.3 Million Tonnes |
| Monnet Ispat | 0.8 Million Tonnes | 0.73 Million Tonnes |
| BMM Ispat | 0.7 Million Tonnes | 0.63 Million Tonnes |
| Tatat Sponge | 0.39 Million Tonnes | 0.36 Million Tonnes |
Source: Company Reports, Company Sources, SteelMint *Provisional Data
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