Indian sponge iron prices increased by INR 200-1,100/t over the week on the back of higher iron ore/pellet prices and improved demand.
Prices in east and central India have rallied by INR 600-1,100/t while in south India’s Bellary & Hyderabad regions it has slightly rise by INR 100-200/t.
SteelMint’s assessment of 78-80 FeM coal-based sponge P-DRI was INR 18,200-18,400/t ex-Raipur (central India), INR 19,300-19,500/t in Durgapur (east India) & INR 17,500-17,700/t in Bellary (south India).
Industry sources are hopeful that domestic sponge iron prices will remain supported as mills have booked sufficient orders while pellet and iron ore prices are expected to gain in the near-term on tight supplies.
Factors supporting sponge iron prices
Iron ore gains- Domestic iron ore prices have increased in the past few weeks on several factors including monsoon rains disrupting mining and logistics, majority of auctioned mines in Odisha not resuming operations yet, robust export demand for low-grade fines and pellet and bullish global price trend making imports nonviable. Odisha-based domestic mining company Odisha Mining Corporation (OMC) had scheduled iron ore lump e-auction on 31st July’20. The entire quantity of 600,000 t was booked upto INR 500/t over the set base price. Sponge iron producers have lifted iron ore purchases in anticipation of short supply from Odisha in the near-term.
Seasonal Impact – Prices seasonally gain in monsoon season due to slow production and short supply of raw materials like coal and iron ore. Sponge iron stocks with mills are tightening, which is supportive of prices.
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