Sponge iron offers went down by Rs 200-300/MT on falling
steel prices in India, though industry participants expect prices
should find support at these levels.
“It is interesting to note that sponge iron prices have
not corrected in proportion to ingot or billet prices. The reason for this
could be that there are not many sellers at low levels. Scrap Imports are
almost nil from last few weeks on weakening Rupee. Furnaces in north are
expected to start buying sponge iron once their stock for scrap dries out”,
said a big sponge iron trader based in
Mandi Gobindgarh.
Whereas, Sponge iron made from Pellets in Bellary is quoted
at Rs 20,000 i.e. unchanged from the previous trade.
According to market players, “Sponge iron prices have been
firm from quite some time in order to maintain parity with scrap prices. Though
INR vs Dollar have reached the level of 54 and scrap imports have also gone down, the demand
for sponge iron is still not picking up as issues concerning raw material
availability, power issues and slowdown in construction activities have affected
the trade in the market.”
“Bigger companies like JSW in Bellary is also under a CBI
scan. So, the overall outlook of the sponge iron industry in South may not be so positive in the near term”,
he added further.
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