Iron Ore Sourcing of Major Sponge Iron Plants Up in Aug’16

India’s 12 major sponge iron plants raised their iron ore sourcing by 7% M-o-M.

India’s sponge iron capacity is 47 MnT in FY16 out of which top sponge makers contribute the major part in India’s sponge iron production. SteelMint tried to analyze iron ore sourcing pattern of India’s major sponge producers whose combined share is about 35% of India’s total sponge production capacity.

These sponge iron plants have increased their iron ore sourcing from 2.31 MnT in Jul’16 to 2.46 MnT in Aug’16.

Essar Steel’s iron ore sourcing moved up by 9% M-o-M in Aug’16 as the steel maker significantly (33% M-o-M) increased iron ore procurement from NMDC (C.G.) in Aug’16 and sourcing from Odisha increased by 8% M-o-M.

Jindal Steel & Power raised its iron ore procurement by 14% M-o-M from 0.63 MnT in Jul’16 to 0.72 MnT in Aug’16. The company is aggressively participating in pellet exports.

Southern India based BMM Ispat sourced 92,000 MT iron ore fines from Karnataka e-auctions in Aug’16 compared to 112,000 MT in Jul’16.

Iron ore sourcing of other major sponge makers in Aug’16 was follows: Shyam group – 0.1 MnT (up by 3% M-o-M), Rashmi Metalliks – 0.2 MnT (down by 4% M-o-M) and Usha Martin – 0.1 MnT (up by 10% M-o-M).

12 Major sponge plants iron ore sourcing: Aug’16 vs Jul’16

*It does not include procurement from their respective captive mines
Qty in MT
Provisional Data
Source: SteelMint Research

Sponge iron prices moved up sharply in Aug’16 – Sponge iron prices increased sharply last month. Monthly average C-DRI (78 FeM) price in Durgapur was assessed at INR 12,200/MT (delivered) in Aug’16 against INR 11,500/MT (delivered) in Jul’16.

Sponge production shortage over monsoons and increase in coal prices resulted in price hike in eastern India sponge market.