Piling stock in the major sponge markets is indicating negative sentiments in near-term.
Sources reported that buyers are skeptical to book material at current offer due to continuous fall in prices.
“Buying is only received when there is positive sentiments prevailing in the market. We are now selling sponge twice or thrice in a week”, said a sponge manufacturer in Raipur.
The major reason behind rise in inventory is buyers are purchasing material two or three times in a week. Adding to this, central India based buyers have also postponed local buying due to competitive offers from neighboring state.
Meanwhile, buying in Raipur is low from west India. A rebar producer from Jalna (west India) said that why to buy sponge when billet is more cheaper in central India.
However, few participants mentioned that P-DRI prices have already bottomed out at INR 10,500-11,000/MT and C-DRI at INR 11,700-12,200/MT and below this levels, it become un-viable for sponge manufacturers to run their units.
Trade-wise
1. P-DRI in Raipur was sold at INR 11,000-11,200/MT; down by INR 200/MT compared to previous day closing and INR 1,400/MT M-o-M. Prices touched highest level on 4 Jan’16.
2. Few deals in Raipur for billet were concluded at INR 20,200/MT ex-plants with a discount of INR 200-300/MT from general market quote. In addition, it also become viable to supply billet from central to west and north India.
3. Durgapur based sponge manufacturers held offers for C-DRI at INR 11,700/MT and P-DRI at INR 10,700/MT.
4. BMM Ispat in Karnataka reduced offers against last week and currently trading 80 FeM P-DRI at INR 11,200/MT ex-plant.
5. Prakash Sponge reduced offers for 78 FeM C-DRI lump at INR 11,700/MT ex-plant (Karnataka); few deals in last week were concluded at INR 12,000/MT.
6. Raigarh and Rourkela are selling sponge in bulk to Raipur based smelters. Freight from Rourkela to Raipur is assessed at INR 950-1,000/MT and from Raigarh at INR 450-500/MT.
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