With Shah commission's probe on illegal mining in the state of Odisha, market trader see supply of iron ore getting critical in near term. This will lead to cut in production by sponge units. Induction furnaces will be forced to buy scrap from all possible sources (domestic and international), said participants.
Sources tell, that many steel mills and traders have started stocking scrap in order to immune themselves from anticipated shortage.Recently imported scrap offers have also gone up to $405-408/t CFR India for HMS 1 & 2.
“We use 80 percent sponge iron and 20 percent scrap, but it seems sponge supply will be affected, looking at iron ore situation in Odisha. There are many millers who would be switching to scrap if sponge prices go up or supply gets limited.” said an induction furnace owner based in Raipur, Chattisgarh.
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