In Southern region of India, sponge prices have risen by at least INR 500/MT (USD 8) in the current week.
The prices surged in line with improved demand by billet manufacturers and also due to rising scrap prices globally.
SteelMint’s assessment for 78-80 FeM coal based Sponge C-DRI are reported at INR 16,000-16,500/MT (USD 245-255) ex-plant. This was an increase of INR 500/MT compared with last week’s assessment at INR 15,500-16,000/MT (USD 238-246) ex-plant.
“Sponge Iron prices are expected to remain strong as there are seasonal production issues and also due to rising scrap prices globally” an official from a billet mill in South India said.
Notably, global scrap prices which were offered at USD 270-280/MT CNF India in the mid of June 2017 have soared to USD 290-300/MT.
Post GST, the delivered price (FoR) has decreased over old tax calculations. Hence, the manufacturers are also receiving good response from buyers based in other states. Few deals have been reported by small manufacturers for FeM 80 C-DRI lumps to Mumbai at INR 17,500-18,000/MT FoR (excluding GST of 18%).
BMM Ispat, the major sponge producer in the region, having sponge production capacity of 2,300 TPD (0.7 Mnt pa). The company is offering FeM 80 P-DRI lump at INR 15,800/MT ex-plant.
Another renowned manufacturer in the state namely Sunvik Steels who makes prime grade material (high metalization) is offering C-DRI lumps – 80 FeM at INR 16,500/MT & 82 FeM at INR 16,900/MT ex-plant.
Karnataka is the third largest sponge iron producing state in India which contributes about 9-10% in country’s total DRI production.
Source: SteelMint Research
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