In the month of Jun’16 too southern India based sponge iron plants are seen sourcing iron ore from domestic market. With no iron ore import vessels expected to reach in Jun’16, southern India based units are going for either domestic e-auctioned ore or domestic pellets.
It should be noticed NMDC has not reduced price in e-auctions since Apr’16 whereas price of Baila lump & fines have reduced from C.G. mines by upto 22%. Major reason as told were firm buying and less viability of imported iron ore.
Hyderabad based plants majorly relying on domestic pellets
A southern India based market participant highlighted that majority of units in Hyderabad are relying on Bellary pellets except few like Maruti Ispat & Energy who are going for e-auctioned ore.
Currently Bellary pellet (Fe 63%) prices are assesed at INR 4,250/MT (basic). As per trade sources, at these prices, landed cost of pellets to Hyderabad is heard to stand at INR 5,035/MT.
Bellary based units prefer iron ore, e-auction prices stable in May’16
Bellary based units are seen preferring e-auctioned iron ore. Base prices in the e-auction continue to remain stable on monthly premises.
A Bellary based sponge iron manufacturer shared “Mostly all sponge iron manufacturers in Bellary are using e-auctioned lumps. There are only handful number of sponge iron plants specially in Hospet and Koppal regions using pellets”.
On one hand raw material prices (iron ore and coal) are high and on the other sponge iron prices are weak. Market is very dull. He added.
Base prices of lump (Fe 65.2%) offered by NMDC Donimalai mines are seen at INR 2,184/MT (basic). Iron ore base prices of NMDC Kumaraswamy mines are seen at following levels- fines (Fe 57.1%) stood at INR 1,185/MT and lump (Fe 63.7%) stood at INR 1,856/MT (basic).
Base prices for fines (Fe 65%) offered by Vyasankere mines remained at INR 2,025/MT (basic) and bid prices stood in the range of INR 2,115-2,125/MT (basic). Bid prices for lump (Fe 65%) are seen hovering in the range of INR 2,155-2,165/MT. Bid prices of Sesa Sterlite’s lump (Fe 60%) stood at INR 1,421/MT (basic).
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