Sponge iron prices in Raipur have surged by INR 400-700/MT and in Durgapur by INR 250-400/MT W-o-W. However in South India, prices have declined by INR 500/MT due to increased production of Sponge iron.
East India Sponge iron prices increased this week, except in South (To know more, click here). Major reason cited in East India was shortage of Sponge iron, as most of the C-DRI manufacturers have shifted to Pellet sponge production.
A Sponge manufacturer in Raipur said, “We have postponed Iron ore buying as we expect prices to fall further by INR 500-800/MT, if all mines in Odisha start operating. Temporally, we have shifted to Iron pellet.”
A similar comment was received from a West Bengal Sponge iron manufacturer. Considering this, it is expected that Sponge iron availability will increase after 10-15 days.
Meanwhile, a Sponge manufacturer postponed buying as they assess current prices unviable. Furnace operators are seeking to buy Sponge iron (DR CLO) in Raipur at INR 18,000-18,200/MT and in Durgapur at INR 17,600/MT.
Many manufacturers deferred Iron ore buying as they expect further fall in Iron ore prices. Few big Iron ore miners like Serajuddin, Rungta and Indrani Patnaik have cut Iron ore prices for May deliveries. As per an Odisha based miner, it is anticipated that Iron ore prices will further reduce by INR 500-700/MT during 7th to 30th of May’15.
An Ingot manufacturer quoted, “We need to maintain conversion gap from DR CLO to MS Ingot at INR 7,500-8,000/MT. Now, it has shrunk to INR 7,000/MT. It is better for us to close the furnace rather than to purchase Sponge iron.”
Trade Dynamics
1) C-DRI is offered in Durgapur at INR 17,900/MT (+ 350) and P-DRI at INR 16,050/MT (+ 100)
2) In Raipur, 82+ FeM C-DRI offers are assessed at INR 18,300/MT (+ 950) and the same grade P-DRI at INR 15,700/MT (+ 100). Sponge iron prices have risen sharply by INR 950/MT in Raipur owing to low supply of Iron ore in the domestic market
3) Sponge iron prices in South India have corrected sharply by INR 500/MT W-o-W. 78+ FeM C-DRI is being offered at INR 15,700/MT in Bellary and 82+ FeM at INR 16,350/MT; both grades’ prices have corrected by INR 500/MT
4) Major Iron ore miners Serajuddin and Indrani Patnaik had reduced their Iron ore prices by INR 500-750/MT
5) NMDC is likely to declare prices this week
C-DRI Prices as on 11 May’15
| Particular | Grade | Prices | W-o-W | M-o-M |
| Ex-Durgapur# | 78 FeM | 17,900 | + 350 | – 300 |
| Ex-Rourkela | 78 FeM | 15,650 | + 50 | – 1,350 |
| 80 FeM | 16,200 | 0 | NA | |
| Ex-Raipur | 80 +/-1 FeM | 17,400 | + 400 | – 200 |
| 82 +/-1 FeM | 18,550 | + 950 | + 150 | |
| Ex-Bellary | 75 FeM | 15,200 | – 450 | – 950 |
| 78 +/-1 FeM | 15,700 | – 500 | – 1,050 | |
| 82 + FeM | 16,350 | – 450 | NA | |
| Ex-Hyderabad | 82 + FeM | 18,000 | 0 | NA |
Prices in INR/MT
#Delivered Price
Source: SteelMint Research
P-DRI Prices as on 11 May’15
| Particular | Grade | Prices | W-o-W | M-o-M |
| Ex-Durgapur# | 78 FeM | 16,050 | + 100 | – 750 |
| Ex-Jharsugda | 78 FeM | 14,500 | – 100 | NA |
| Ex-Rourkela | 78 FeM | 14,500 | – 100 | NA |
| Ex-Raipur | 80 +/-1 FeM | 15,700 | + 100 | NA |
| Ex-Bellary | 78 +/-1 FeM | 14,500 | – 500 | – 900 |
| Ex-Hyderabad | 77 FeM | 15,500 | – 300 | – 800 |
Prices in INR/MT
#Delivered Price
Source: SteelMint Research
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