Indian Sponge Offers Increase on Expensive Coal

Sponge offers improved today as Coal India has recently increased coal prices by 6.29% w.e.f 30 May’16. However, prices in south India have corrected by INR 200/MT D-o-D.

Current 78-80 FeM C-DRI prices are assessed in the range of INR 10,700-12,600/MT and P-DRI at INR 10,400-12,200/MT ex-works.

Rourkela and Durgapur based manufacturers reported that they have raised their offers on account of increase in enquiries from buyers. This week, trades are more or less remained firm due to bullish sentiments.

Rourkela based sponge makers are offering 80 FeM C-DRI lump to west and north India based buyers at INR 10,900-11,000/MT. While, Durgapur is offering 78 FeM mix material to north-east buyers at INR 11,300/MT; both offers are on ex-plant basis.

Manufacturers mentioned that they are not fetching better production cost at current offers. Moreover, they are aggressively waiting for iron ore price declaration for Jun’16 deliveries as it expected that miners may reduce their offers.

Sponge market in Hyderabad has registered a fall of INR 200/MT against last day trade. Manufacturers here are saying that lack of demand from buyers has pushed them to sell material at low price. Today, 80 FeM C-DRI sold at INR 12,600/MT. While, billet prices remain unchanged at INR 22,500/MT.

Few Bellary based manufacturers reported that demand from local market remains dull and they prefer to hold stock instead of price cut. Offers for 80 FeM P-DRI lump are assessed at INR 11,400-11,500/MT and C-DRI at INR 11,700-11,800/MT ex-plant.

Premium between sponge iron (C-DRI) and pellet sponge (P-DRI) in central India has decreased to INR 1,300/MT, which was 1,400/MT last week. In eastern region, it is firm at INR 1,050/MT and in south to INR 300-400/MT.

C-DRI and P-DRI prices as on 31 May’16

Prices in INR/MT
Source: SteelMint Research