Indian Sponge Offers Hit 4 Months High

Sponge offers in domestic market is progressively increasing and has reached 4 month’s high levels. Strong demand, low productions and higher prices of substitute products lead to spurt sponge prices in Indian market.

SteelMint’s price assessment for FeM 78-80 C-DRI prices in domestic market are hovering in the range of INR 17,500-19,000/MT (USD 273-297). The similar levels were last seen in Apr 2017.

Below are factors have resulted in hike in Indian Sponge iron offers –

Short Supply: Availability of sponge iron in major markets specifically in Central, East, South has witnessed declined due to the reasons like seasonal low output and scarcity of raw material like coal & iron ore with the plants due to logistic issue which in turn lead to reduction in operation works too.

Uptrend in substitute products: There is a sharp hike in offers of Substitute products like scrap & pig iron. In current month domestic scrap & pig iron offers increase approximately INR 500-1,000/MT (USD 7-15) due to low availability of material amid strong global trend.

Rise in coal prices: South African Non-coking coal prices have increased in synchronization with the rising Australian coal prices. Recent offers for (RB2) 5500 NAR coal are heard around USD 88-89/MT, CNF India. Prices are up by USD 6-8/MT in last couple of weeks.

Updates

1. SteelMint’s Pellet based sponge (P-DRI) offers are assessed at INR 17,700-17,800/MT & DR-CLO based sponge iron offers at INR 19,600/MT ex-works, excluding GST of 18%.

2. Odisha based medium size sponge producers reported non-availability for ready dispatch material and the offers for FeM 80 C-DRI lumps at INR 17,800-18,000/MT ex-plant & excluding of GST at 18%.

3. India’s fresh export offers for sponge iron lumps with Sulphur 0.03-0.05%, Phosphorus 0.05-0.07 & carbon max at 0.11-0.12% are reported at USD 310-320/MT CPT Benapole port, Bangladesh.

4. National Mineral Development Corporation (NMDC), India’s largest iron ore producer has announced to keep the prices unchanged for Aug’17 deliveries. Price revision updates from Odisha based miners are yet to be update for current month.