The month of April was quite bearish for Indian sponge manufacturers as prices showed a steep correction of INR 400/MT in major markets like Durgapur and Bellary.
Besides, other markets, including Rourkela and Raipur registered a slight decline of INR 150/MT and INR 250/MT separately on monthly average premises. Whereas, global market reported positive price sentiments for scrap and billet.
Throughout the month, highest price level was witnessed in Bellary at INR 12,550/MT on 2 Apr’16 and lowest at INR 12,000/MT on 14 Apr’16. While analyzing monthly average, prices in Durgapur and Bellary dipped to INR 12,050/MT (-3.3%) and INR 12,200/MT (-3.2%) respectively.
The major reason cited by market participants was high inventory levels that continue to build selling pressure on manufacturers. Illustrating the factor of price correction, a director of an integrated production plant located in Durgapur stated that despite of in-home consumption of 500-600 MT per day, inventory level during Apr’16 was reached to 1,500-2,000 MT amid subdued demand.
NMDC reduced price for May delivery by INR 90-220/MT. Whereas, Odisha based iron ore miners had kept their prices stable. In the meantime, billet offers throughout the month remained firm with showing marginally price change of INR 50-350/MT.
Monthly average sponge prices with M-o-M change
| Month | Bellary | M-o-M | Durgapur | M-o-M | Raipur | M-o-M | Rourkela | M-o-M |
| Apr’15 | 16,600 | -800 | 18,000 | -200 | 17,450 | -800 | 16,450 | -50 |
| May’15 | 15,750 | -850 | 17,300 | -700 | 17,000 | -450 | 16,100 | -350 |
| Jun’15 | 15,050 | -700 | 16,000 | -1,300 | 16,500 | -500 | 15,400 | -700 |
| Jul’15 | 14,550 | -500 | 15,300 | -700 | 15,400 | -1,100 | 14,200 | -1,200 |
| Aug’15 | 13,900 | -650 | 14,900 | -400 | 15,500 | +100 | 14,000 | -200 |
| Sept’15 | 13,950 | +50 | 15,100 | +200 | 15,900 | +400 | 14,700 | +700 |
| Oct’15 | 13,400 | -550 | 13,600 | -1,500 | 14,050 | -1,850 | 13,050 | -1,650 |
| Nov’15 | 12,600 | -800 | 12,200 | -1,400 | 13,050 | -1,000 | 11,600 | -1,450 |
| Dec’15 | 12,250 | -350 | 12,400 | +200 | 13,000 | -50 | 11,700 | +100 |
| Jan’16 | 12,050 | -200 | 12,250 | -150 | 12,950 | -50 | 11,600 | -100 |
| Feb’16 | 11,900 | -150 | 12,900 | +650 | 13,250 | +300 | 11,700 | +100 |
| Mar’16 | 12,600 | +700 | 12,450 | -450 | 13,150 | -100 | 11,500 | -200 |
| Apr’16 | 12,200 | -400 | 12,050 | -400 | 12,900 | -250 | 11,350 | -150 |
Prices in INR/MT
Source: SteelMint Research
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