Indian Sponge iron market remains unaltered this week. However, pressure continues to mount as Iron ore supply is likely to increase in the market in coming weeks. After two major Iron ore mines namely Rungta & Serajuddin received permission to ramp up their production by about 15-16 MnT, Iron ore prices have declined by INR 300-400/MT in Odisha. In addition, a dispatch target has been set by Deputy Director of Mines, which may push miners to cut prices further and sell the stock. These factors are likely to increase Iron ore supply in near-term. Meanwhile, Iron Pellet prices have also shown downgrading sentiments in Raipur, Durgapur including Odisha.
Spongemakers are under pressure
Karnataka Factor: Trade participants mentioned that decent supply of Sponge from JSW Steel has put market under pressure. Offers are quite competitive compared to other manufacturers. Participants expect that Sponge prices may decline further in Karnataka. Currently, they are hovering in the range of INR 18,000-19,500/MT (USD 285-310/MT) ex-works.
Participants also highlighted that JSW Steel is offering 79 FeM Pellet sponge (P-DRI) at around INR 18,000/MT (ex-works) with an additional discount of INR 600/MT on purchase of over 1,500 MT.
On the other hand, in a major development, Sponge iron manufacturers (Karnataka) have recently met Finance Minister and requested to reduce minimum bid quantity to 1,000 MT (currently 4,000 MT) in the Iron ore e-auction taking place in Karnataka.
Indian Rupee: Indian currency has strongly appreciated to 62.35 against USD from 63.5 in last few trading sessions. This will lead to cheaper import of Scrap to India and is likely to put pressure on Sponge iron prices.
Trade-wise
- Sarda is offering Pellet sponge (80 FeM) at INR 18,100/MT and Iron pellet at INR 7,400/MT; both ex-Raipur & advance payment
- Vandana is offering Sponge (0-20 mm; C-DRI) at INR 19,600/MT and DR CLO at INR 20,100/MT ex-Raipur
- Sponge maker based in Raigarh (Central India) offers C-DRI (lump; 79-80 FeM) at INR 19,400-19,500/MT ex-Raigarh, CST extra
- Prakash Sponge & Power, a well-know Sponge manufacturer based in Karnataka, is offering C-DRI lump (77-79 FeM) at INR 19,000/MT and C-DRI fines (74-76 FeM) at INR 17,000/MT ex-Bellary
- Odisha based manufacturers are trading C-DRI (70:30/fines; lump) at INR 17,800-18,000/MT in local market, VAT extra. While, they are offering the same material at INR 18,000-18,200/MT, CST extra
- Shyam Metalics (Shyam Group) is offering P-DRI (78 FeM) at INR 17,400/MT ex-Jharsugda
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