JSW Steel, India’s largest private steel producer has increased its gas based DRI (sponge iron) offers by around INR 500/MT (USD 8) for March, 2018 deliveries, according to trade participants.
The current offers for FeM 80-82 DRI are reported at INR 23,000-23,500/MT (USD 353-361) which was at INR 22,500-23,000/MT (USD 346-353) in Feb’18. The material is produced and offered from its Dolvi, Maharashtra based plant, ex-works.
According to experts high raw material cost and sharp surge in Scrap as well as Pig iron prices may have possibly pushed producer to raise sponge prices. In Feb’18, domestic scrap prices increased by INR 500-1,000/MT (USD 8-15) and Pig iron by INR 2,000-3,000/MT (USD 30-45).
JSW Steel has been selling 10,000-20,000 MT sponge iron per month in open market since 3 to 4 months. The company has annual DRI (Sponge iron) production capacity of 1.6 MnT in Dolvi plant. The overall crude steel capacity of company is at 18.00 MnT in which the production during FY17 stood at 15.8 MnT.
According to the trade participants, there are no major bookings by local Ingot/billet makers at the increased prices as landed cost of sponge iron from South and East India is cheaper by approximately INR 1,000/MT. However, Special steel makers can afford the current offer prices by JSW Steel, they added.
The Ingot/billet manufacturers in Mumbai and surrounding markets reported landed cost of sponge iron of Bellary and Rourkela at around INR 22,500-23,000/MT. While, JSW ex-works prices are hovering at INR 23,000-23,500/MT for which landed cost would be around INR 24,000/MT. Both prices are excluding 18% GST.
Current offers for sponge C-DRI 80 FeM are hovering at INR 21,300-21,500/MT ex-Bellary – South India and INR 20,600-20,800/MT ex-Rourkela – East India.
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