Minor Price Fluctuations in Indian Sponge Market

Domestic sponge market has opened today with a slight price corrections of INR 50-100/MT, except south. Current C-DRI offers are assessed in the range of INR 11,200-13,200/MT and P-DRI within INR 10,500-12,950/MT.

Raipur: Offers have been stable since a long duration due to less number of suppliers in the market and limited supply by Odisha based manufacturers. Offers for P-DRI are assessed in the range of INR 11,100-11,300/MT, C-DRI at INR 12,300-12,500/MT and DR-CLO at INR 13,300-13,500/MT.

Durgapur & Rourkela: Short supply of iron pellets and sponge has supported market. However in last 1-2 days, sponge offers reduced by approx INR 200/MT on the backdrop of falling billet prices. Current offers for C-DRI are assessed at INR 11,400-11,500/MT ex-Rourkela and INR 12,400-12,500/MT ex-Durgapur. Moreover, P-DRI prices are evaluated at INR 10,500-10,600/MT ex-Rourkela/Jharsuguda and INR 11,500-11,600/MT ex-Durgapur.

Bellary: At present, offers for 80 FeM P-DRI are in the range of INR 11,900-12,000/MT. While, the same grade C-DRI is available at INR 12,500/MT on ex-plant basis. Supply to Hyderabad market is nil due to cheaper offers by Hyderabad based local manufacturers.

Outlook

Major markets based manufacturers mentioned that sponge prices in near term may strengthened further due to rising coal prices in the global market. RB2 South African coal offers during the month of May-Jun’16 were seen at USD 52-54/MT, which now increased to USD 61-62/MT for Sept’16 shipments; increased almost by USD 8/MT. Input cost of manufacturers may increase by INR 500-700/MT.

Today, the Indian government also hike freight charges by 8-14% for 200-700 km movement of coal. This is an another burden on Indian sponge manufacturers.

Premium between C-DRI and P-DRI as on 23 Aug’16

Prices in INR/MT
Source: SteelMint Research