Indian sponge prices continue to remain bearish in May’16 as price fall by INR 500-700/MT (4-6%) in all major markets. Major reason cited were increase in sponge iron production due to increase availability of Iron ore. Iron ore production rose by 22% in FY16. Other factors were falling billet & scrap offers in Indian Domestic & Global market worried Indian sponge makers.
Throughout the month, highest C-DRI price level was witnessed in Raipur at INR 12,600/MT second at Bellary at INR 12,100/MT on 2 May’16 and lowest at INR 11,350/MT on 25 May’16. While analyzing monthly average, prices in Durgapur and Bellary dipped to INR 11,300/MT (-6.63%) and INR 11,650/MT (-4.72%) respectively.
Future Outlook: Market participants and trade sources assume prices already running at bottom levels from quite some times. Presently sponge prices are driven by increase in production. Price may remain range bound at present levels.
NMDC and Odisha based Iron ore miner reduced price for June deliveries by 5-12% (INR 150-230/MT) has provided some relief to sponge makers. Iron Pellet manufacturer also looking domestic buyers as global demand remain absent. Billet prices at across India reduced by around INR 1,000-1,700/MT M-o-M put pressure on sponge makers.
Monthly Average CDRI 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 |
| May’16 | 11,650 | -550 | 11,300 | -750 | 12,300 | -600 | 10,700 | -650 |
Prices in INR/MT
Source: SteelMint Research
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