Wednesday, 15 September,
Sponge iron (DRI) prices have gone up to Rs 17,500/MT ($380/MT) primarily due to high input cost such as iron ore lumps, which has gone to Rs 6,400/MT ($140/MT) in the local market (Ex Mines) despite of low steel demand in the Indian market.
“Demand of finished steel has been weak majorly due to late monsoon in India; construction activities remain low in many places”, said one of the steel producer based in North India.
“Landed cost of iron ore is approximately around Rs 7,500/MT ($163/MT) for 65% Fe iron ore. It means for producing one tonne of sponge iron, our iron ore cost becomes Rs 13,000/MT ($282/MT) (recovery 0.6) and coal costs Rs 4,500/MT ($95/Mt) plus conversion cost of about Rs 1,000/MT ($21/MT). Total cost of producing sponge iron ore is about 18,500/MT ($402/MT) and sponge iron is selling at Rs 17,500/Mt ($380/MT); a manufacturer may be incurring a loss of about Rs 800-1,000/MT ($95/MT)” said one of the sponge manufacturer in Central India.
Reported by Monica Pattanaik (monica@steelmint.com)
Leave a Reply