In a month’s time most of the Sponge market has seen an increase  of about INR 500-600/MT. Whereas, in Durgapur Sponge prices have shot up by INR 1,000-1,500/MT.

SteelMint on assessing the market has found that following are the reasons behind the Price Hike:

Buying improved in other states: Increase Re-bar buying from last month has led to high demand of MS Ingot/Billet from other states. Durgapur is experiencing demand of MS Ingot/Billet in local as well as overseas market, learned SteelMint. Production of Ingot/Billet is at around 2.4 MnT pa i.e. 2, 00,000 MT per month in West Bengal.

[su_quote]A Manufacturer based in Kolkata said, “We are selling 40-50% of Billet regularly to nearby states. Limited production of MS Ingot/Billet in U.P, Mandi, Bhiwadi & Bihar is owing to shortage of Scrap and high Power cost. Therefore, buyers are purchasing material from Durgapur.”[/su_quote]

MS Ingot/Billet productions have increased all over India: Recently, increased productions of around 20-40% in MS Ingot/Billet have also triggered Sponge demand, supporting the raising Sponge prices.

High Iron ore Pellet prices: Sponge manufacturers of Bengal mostly purchase Iron ore from Odisha. In a month’s time, there is a increase in Iron ore Fines & Iron Pellets prices by INR 200-500/MT that increase the production cost by INR 600-700/MT in Odisha.