Raipur – one of the major sponge producing market in central India has observed significant drop in prices on account of demand-supply mismatch as inquiries from local mills remained bearish, although supply remain strong on rising capacities. Currently prices are hovering at 18-months low as these levels were last seen in Nov-Dec’17.
The last deals for Sponge P-DRI (FeM 80) reported at INR 17,800-18,000/MT, C-DRI (FeM 80) at INR 19,000-19,200/MT & DR CLO (FeM 82+) grade at around INR 20,000-20,100/MT ex-plant, Raipur & excluding GST. These price range were last noticed during end of Nov’18.
The local sponge manufacturers have stated that supply is excess in Central region as couple of integrated plants in Raipur have further raised production capacities although demand remained stable as healthy sourcing being noticed from neighbouring markets i.e. Raigarh & Rourkela.
SteelMint learned that, one of integrated plant in Raipur has commenced production in its new kiln which has installed capacity of 500 TPD and could produce more than 600 TPD sponge iron. Further few small plants of 100-150 TPD stated ramp up in capacities. This has resulted strong supply in merchant market since quite some time.
As per assessment, in a week, sponge P-DRI prices in India fell by INR 500-1,000/MT (USD 7-14), in which major fall of around INR 900-1,000/MT recorded in Raipur, whereas in remaining markets prices corrected in just half by INR 400-600/MT.
Few participants expect, prices may remain under pressure as supply is strong, although demand is slow, however chances of sharp price correction remains less. Also lifting is still pending of sponge iron which were booked by furnaces of more than 20 days ago, as informed by brokers.
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