Indian Sponge iron (DRI) prices may come under pressure on falling Scrap offers from global market.
SteelMint accessed that Scrap prices declined by USD 5-10/MT last week, is expected to fall further owing to weak demand from Turkish steel mills, the largest buyers of imported Scrap from US & Europe.
[su_quote cite=”said a Scrap importer based in Mumbai.”]Current offers of Scrap suppliers from US/Europe are at around USD 370-375/MT CFR Mumbai (HMS 1&2), however buying interest stand at around USD 360-365/MT. Prices are likely to come down as global Scrap prices corrected by USD 20-25/MT in last one month. Its impact will be seen in Indian market also.[/su_quote]
SteelMint also assessed that falling Scrap offers will slightly affect Sponge iron prices in domestic market. Induction & Electric arc furnaces located in India’s western & Northern region will refer Scrap instead of Sponge iron.
A Sponge iron trader based in Maharashtra mentioned that steel smelters are anticipating Sponge iron prices to fall by February end or in first week of March owing to low offers of imported Scrap.
Current Sponge Iron Prices
|
Place |
Product |
15 Feb, 2014 |
08 Feb, 2014 |
15 Jan, 2014 |
|
Raipur |
Sponge Iron |
21,500 |
21,600 |
20,200 |
|
Sponge Pellet |
20,100 |
20,000 |
19,000 |
|
|
Rourkela |
Sponge Iron |
19,200 |
19,400 |
18,500 |
|
Sponge Pellet |
– |
– |
– |
|
|
Raigarh |
Sponge Iron |
20,150 |
20,300 |
19,800 |
|
Sponge Pellet |
19,100 |
19,300 |
18,800 |
|
|
Durgapur |
Sponge Iron |
20,300 |
20,400 |
20,500 |
|
Sponge Pellet |
19,100 |
19,400 |
19,500 |
|
|
Hyderabad |
Sponge Iron |
– |
– |
– |
|
Sponge Pellet |
20,500 |
20,700 |
19,900 |
Basic Prices in INR/MT
Excise duty @12.36; VAT as applicable
India is the largest Sponge iron producer in the world with an installed capacity of 40 MnT, however its production is about 50% owing to restricted supply of Iron ore in the domestic market.
On the other hand, India is the third largest Scrap importer in the world after Turkey& South Korea. India imported around 7 MnT of MS scrap in FY13, but expected to fall to 5 MnT in FY14 due to weak Indian currency and import duty imposed by Indian Government in 2013.
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