East India: Sponge & Pig Iron Prices Under Pressure Amid Power Cut in Bengal

The local sponge iron & pig iron manufacturers in Bengal, East India reported limited demand for the materials over unscheduled power cuts by Damodar Valley Corporation (DVC) since more than a week’s duration.

Durgapur, Asansol, Ranigunj & Barjora, the wide industrial areas of Bengal is currently facing power cut due to limited supply of Power by the major supplier, DVC – which is a governmental organization and operates several power stations in the Bengal & Jharkhand states in eastern India. The corporation operates both thermal and hydel power stations under the Ministry of Power, Govt of India.

As per Sponge iron producers in Bengal, Durgapur they are not receiving any buying interest at the offers quoted as most of EA or Induction furnaces have temporarily suspended operations due to power shortage. Thus, the local sponge prices in the Bengal, Durgapur have fallen by around INR 1,000/MT (USD 14) in last 3-5 days.

Similar comments were received from the Pig iron & standalone Billet producers, where the deals are limited at the offers of INR 31,100-31,300/MT & INR 36,500/MT, ex-Durgapur & excluding GST.

As per data, Bengal’s monthly average Billet production is about 500,000 MT for which sponge iron consumption is close to 600,000 MT. If the power cut continues, local sponge iron prices are likely to remain negatively impacted, as per industry participants.

Further as the re-rollers are also unable to operate to full capacities, the Billet sales reported lessened in domestic market. Local Billet prices in Durgapur down by around INR 500-700/MT in current week and the latest offers stood at INR 36,400-36,600/MT.

Durgapur, West Region  Steel Prices

Basic prices in INR/MT
Source: SteelMint Research