On monthly average basis, sponge prices in Central & East India gain by INR 150-450/MT (2-3%) in Feb’17. However, in South India, Bellary & Hyderabad it plunged in the same ratio by 2-3% (up to INR 450/MT).
78-80 FeM C-DRI average prices for Feb’17 are as follow – at INR 15,100/MT (+2.03%) ex-Durgapur, INR 16,200/MT (+2.86%) ex-Raipur, INR 14,450/MT (+2.12%) ex-Rourkela and INR 15,350/MT (-2.00%) ex-Bellary. As cities in line, the comparison to Feb’16 offers gain by 17.05%, 22.26%, 23.50% & 25.63%.
Analyzing price movement in substitute products i.e. melting scrap it surged up to 5-6 % (INR 1,000/MT, Ex-Mumbai) in the Indian domestic market.
During the month the sponge producers reported fall in sponge production due to melt in domestic coal & logistic issue on Iron ore and coal as well. According to the manufacturers on melting domestic coal the cycle of kiln is maximum for 35-40 days however, on procuring imported South African coal the kiln runs continuously for 50-60 days. Thus, on using domestic coal the maintenance of kilns are frequent and it directly affect production levels.
Similarly, fall in productions due to logistic issue to source Iron ore from Odisha to West Bengal. In the mid of Feb’17, Iron ore dispatches were temporarily halted by two major merchants miners namely – KJS Ahluwalia and Kaypee Enterprises has. Thus, for a time being the logistic/supply issue on Iron ore also another reason behind less sponge production in Eastern market. Further, prices were somehow supported on short supply of sponge iron.
In Feb’17, Indian Iron ore prices were unaltered while pellet prices surge upto INR 900/MT. Similarly, global coal (South Africa) offers also surge by USD 2-3/MT to USD 80-82/MT (CNF India).
In the month, the Highest price level were seen for sponge C-DRI FeM 78-80: at INR 17,600/MT ex-Raipur, INR 16,650/MT ex-Durgapur,INR 15,600/MT ex-Rourkel & INR 17,000/MT ex-Bellary. As per the SteelMint it was noted that the major price rise seen in the last week of the month, only.
Monthly average sponge (C-DRI) prices
| Month | Bellary | M-o-M | Durgapur | M-o-M | Raipur | M-o-M | Rourkela | M-o-M |
| Jan’16 | 12,050 | -200 | 12,250 | -150 | 12,950 | -50 | 11,600 | -100 |
| Feb’16 | 11,900 | -150 | 12,900 | +650 | 13,250 | +300 | 11,700 | +100 |
| Mar’16 | 12,600 | +700 | 12,450 | -450 | 13,150 | -100 | 11,500 | -200 |
| Apr’16 | 12,200 | -400 | 12,050 | -400 | 12,900 | -250 | 11,350 | -150 |
| May’16 | 11,650 | -550 | 11,300 | -750 | 12,300 | -600 | 10,700 | -650 |
| Jun’16 | 11,550 | -100 | 11,400 | +100 | 12,100 | -200 | 10,450 | -250 |
| Jul’16 | 11,650 | +100 | 11,500 | +100 | 12,150 | +50 | 10,650 | +200 |
| Aug’16 | 12,150 | +500 | 12,400 | +900 | 12,450 | +300 | 11,200 | +550 |
| Sep’16 | 13,800 | +1,650 | 13,350 | +950 | 14,150 | +1,700 | 12,800 | +1,600 |
| Oct’16 | 14,150 | +350 | 13,950 | +600 | 14,550 | +400 | 13,100 | +300 |
| Nov’16 | 14,100 | -50 | 13,650 | -300 | 14,150 | -400 | 12,600 | -500 |
| Dec’16 | 14,000 | -100 | 14,500 | +850 | 14,650 | +500 | 13,050 | +450 |
| Jan’17 | 15,250 | +1,250 | 14,800 | +300 | 15,750 | +1,100 | 14,150 | +1,100 |
| Feb’17 | 14,950 | -300 | 15,100 | +300 | 16,200 | +450 | 14,450 | +300 |
Prices in INR/MT
Source: SteelMint Research
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