Sponge iron manufacturers in South India (Karnataka & Telangana) are preferring imported Iron ore over domestic because of better availability along with good quality and high yield.
Increased availability of good quality imported Iron ore at cheaper rates has attracted the Sponge manufacturers in South India. In addition, Induction & Arc furnaces also preferred C-DRI over P-DRI due to low ignition loss and less slag formation. In Bellary, 81-82 FeM Sponge iron (C-DRI) is being offered at INR 17,200/MT, while, Pellet sponge (P-DRI) at INR 15,000/MT.
A Sponge producer located in Hyderabad said, “It’s easy to sell Sponge iron over Pellet sponge due to better yield in furnace and low production of Sponge iron. Moreover, present premium of Sponge iron over Pellet sponge has increased to INR 2,200/MT from earlier INR 1,500-1,700/MT.”
South African Fe 62% Iron fines offers were assessed at USD 54/MT, CIF China. While, South African Kumba lump (6-30 mm, 64%) is being offered at USD 68-70/MT, CIF India on High Sea Sales (HSS) for May end or June first week deliveries. Landed cost to Bellary & Hyderabad is INR 6,200-6,500/MT. However, recent price cut of INR 200-500/MT by NMDC will give competition to domestic lumps offers.
SteelMint assessed that increased availability of imported Iron ore and low prices will keep domestic Iron ore & Pellet prices in check. Slowdown in China’s economy has given a signal to big miners based in South Africa to look into Indian market.
Along similar lines, induction furnaces are cautious in making bulk purchases on hopes that mining activities will resume soon in India.
“Amid hope of 26 Iron ore & Manganese mines resumption under MMDR act, there are no buyers to purchase the material in bulk quantities, as of now. It is anticipated that after the resumption of mines, availability of key raw material will increase, which may lead to surge in Sponge iron production. We are also hopeful that in Q2 of this year, Long steel sales will boost because of upcoming new projects”, shared an official from Tata Sponge.
C-DRI & P-DRI Prices as on 23 Apr’15
| Location | C-DRI | W-o-W | P-DRI | W-o-W | Premium (C-DRI – P-DRI) |
| Bellary* | 17,200 | – 300 | 15,000 | – 350 | 2,200 |
| Hyderabad* | 17,800 | NA | 15,800 | – 200 | 2,000 |
| Raipur* | 17,900 | – 300 | 15,800 | – 350 | 2,100 |
| Durgapur | 17,900 | – 300 | 16,400 | – 400 | 1,500 |
*C-DRI: 81-82 FeM; Durgapur: 78-80 FeM
P-DRI: 78-80 FeM
Prices in INR/MT
Source: SteelMint Research
Pellet Prices as on 23 Apr’15
| State | City | Size (mm) | % Fe | Price | W-o-W | M-o-M |
| Odisha# | Barbil | 6-20 | 63 | 5,200 | – 450 | – 600 |
| Odisha | Jharsuguda | 6-20 | 63 | 5,500 | – 300 | – 300 |
| Odisha# | Keonjhar | 6-20 | 63 | 4,800 | – 100 | – 200 |
| Chhattisgarh | Raipur | 6-20 | 63 | 6,050 | – 100 | – 225 |
| West Bengal | Durgapur | 6-20 | 63 | 5,900 | – 50 | – 100 |
| Karnataka | Hospet/Bellary | 6-20 | 62 | 6,300 | – 200 | – 300 |
| Gujarat | Kandla | 6-20 | 62 | 5,300 | NA | NA |
# Prices in INR/MT loaded to wagons
Source: SteelMint Research
Iron Ore Prices for Apr’15
| State | Miner | Size | % Fe | Price | W-o-W | M-o-M |
| Odisha# | Rungta | 5-18 mm | 63 | 5,550 | 0 | 0 |
| Odisha# | Rungta | 10-30 mm | 63 | 4,900 | 0 | 0 |
| Odisha# | Rungta | Fines | 63 | 2,400 | 0 | 0 |
| Odisha# | Serajuddin | 5-18 mm | 63 | 4,850 | 0 | 0 |
| Odisha# | Serajuddin | Fines | 63 | 2,250 | 0 | 0 |
| Chhattisgarh# | NMDC | 6-40 mm | 65 | 3,050* | – 200 | – 200 |
| Chhattisgarh# | NMDC | Fines | 65 | 1,960* | – 500 | – 500 |
| K’ntka E-auction | – | 10-30 mm | 63 | 2,500** | – | – |
| K’ntka E-auction | – | Fines | 63 | 1,800** | – | – |
* 15% royalty extra
** 15% royalty + 12 % Forest Development Tax (FDT) extra
# Prices in INR/MT loaded to wagons
Source: SteelMint Research
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