Southern India Based Sponge Makers Prefer Sourcing Material From Domestic Market

Southern India based sponge manufacturers are seen preferring either domestic lump or pellet over imported iron ore.

A Bellary based sponge manufacturer shared that “We are procuring lump of both NMDC as well as private miners from Karnataka e-auctions. On a monthly basis, sponge prices have declined by upto INR 500/MT. On the other hand, iron ore prices in e-auction are witnessing increase. Market is quite dull.”

Current price scenario in Karnataka e-auctions

It is to be noted that both NMDC and private miners had raised prices considerably in Apr’16 e-auctions and in the e-auctions conducted so far in May’16 base prices continue to remain the same.

Currently prices of NMDC Doni lump (Fe 62%) is at INR 1,910/MT (basic). Its landed cost to a Bellary based plant will stand at around INR 2,700-2,800/MT. Similarly lump (Fe 63.1%) of NMDC Kumarswamy mines is bid priced at INR 1,830/MT (basic). Its landed cost to a Bellary based plant will remain at INR 2,800-2,900/MT.

If we talk about private miners, bid prices of lump (Fe 62%) offered by Sesa Sterlite is currently at INR 1,325/MT (basic). Lump (Fe 65%) offered by Vyasankere mines is at INR 2,165/MT (basic).

Bellary pellet prices down amid weaker sponge prices

A Bellary based pellet maker reported that we have recently concluded pellet (Fe 63%) deals at INR 4,350/MT (basic). Currently pellet prices are hovering in the range of INR 4,300-4,350/MT (basic). Prices have fallen on account of decline in prices of pellet sponge. On monthly basis, prices are down by INR 50-100/MT.

No iron ore import vessels of southern India based steel makers expected to arrive in May’16

Amid volatility in iron ore prices in global market, few steel makers in southern regions of India (primarily Chennai) have kept themselves away from importing iron ore.

Kamachi Group has remained a prominent importer of iron ore in southern India in last fiscal. Apart from this, other importers were Pushpit Steels, Pulkit Steels, Steel Exchange India and Akshara Industries.

A southern India based market source shared that “So far no iron ore import vessels were heard to be booked by southern India based importers and the previously imported material is expected to be utilized by May’16. Hence in Jun’16 the importers will have to go either for domestic iron ore or domestic pellets”.