Sponge manufacturers across India hold offers on restricted supply of iron ore in the market. Manufacturers claim that high prices of iron ore have hit the supply from Odisha and Karnataka, and most of the units are still operating at low capacities.Sponge manufacturers highlight that, prices may rise over limited supply and monsoons ahead.
“Current offers are hovering in the range of Rs 19,600-19,800/t (Basic,Sponge lumps) and Sponge made from pellet is at around Rs 18,000-18,200/t (Basic) at Raipur.Most of the manufacturers have raised offers looking at monsoons ahead.” said a manufacturer based in Chattisgarh.
Only risk that prices may not rise is increased availability of pellet sponge, as it is cheaper and available in ample quantity, he further added.
Another manufacturer based in West Bengal highlight that, due to restricted supply of iron ore, most of the sponge units are buying pellet from the market. But sponge made from pellet has low price realization than sponge made from Iron ore. Currently sponge iron is at Rs 19,200/t (Basic) and pellet sponge at Rs 18,000/t (basic). One tonne of pellet sponge consumes almost 1.5 tonnes of iron pellet.
There is less scope of correction left in sponge iron prices, he further added.
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