Indian Sponge Iron Prices have Limited Scope of Further hike

Indian sponge iron prices shot up significantly in last few weeks owing to improved demand from secondary steel manufacturers and reasonably high Iron ore prices. However, experts feel that there is limited scope of further rise in Sponge iron prices across India. Prime reason sought is falling Iron Ore and Pellet prices in international market, which have directly impacted Indian pellet manufacturers who were counting on exports.

[su_pullquote]Iron Pellet which fetched a value of USD 162/MT FOB in the month of December is hovering at around USD 148/MT FOB, with limited buying.[/su_pullquote]

Availability of Iron Pellet increasing in domestic market will resist any hike in Sponge iron prices. This is quite evident from current scenario, where pellet manufacturers are offering discount despite surge in Sponge iron prices.

[su_quote cite=”A Sponge iron manufacturer based in Eastern region of India mentioned.”]Availability of Pellet have improved in domestic market. Plants like Bhushan, JSPL, BRPL & Arya having huge capacities, will certainly create a price war. We doubt with increase in Pellet production, we will have enough room for any increment in sponge iron prices.[/su_quote]On similar lines, Sponge manufacturers in southern India commented that prices went high due to higher Iron ore prices in Karnataka e-auction, but sustainability looks questionable; also Iron ore prices in last few e-auctions have registered lower bids. 

Current Prices (INR/MT)

Prices Basic Ex-works
Excise duty @12.36; VAT as applicable