Sponge iron prices in Raipur (Central India) have hit 2-1/2 years high.Raipur is a key market for sponge iron in India and has an annual production capacity of around 9 MnT which is about 20% of India’s total capacity. Raipur is also the largest producer of merchant sponge iron in the country.
The current offers in Raipur for Sponge pellet (P-DRI) is around INR 18,000-18,200/MT & Sponge iron lumps (C-DRI) offers are at INR 19,100-19,300/MT. This level was last seen during Jan 2015. The prices are on ex-works basis & excluding 18% GST.
Factors influencing increase in Sponge iron offers –
Short supply: Some large sponge manufacturers are not offering as they have increased captive consumption.
Strong demand from other states owing to higher prices of key substitute products like – Scrap & Pig iron. Notably, domestic scrap & pig iron prices increased by INR 1,500-2,000/MT (USD 23-32) in last two weeks.
Improved Pellet exports: Indian pellet demand continue to remain strong in global market which in turn led to lesser supply in domestic market; directly affecting sponge production and supporting its prices too.
High cost coal: Thermal coal prices have increased in global and domestic market which has increased cost of production for sponge manufacturers.
Other markets:
Further, the sponge prices in other parts of the country like in East & South India also remained on higher side following increasing price across the nation.
Offers for FeM 80 C-DRI mix material in East market – Rourkela at INR 17,600-17,800/MT* & Durgapur at INR 18,300-18,500/MT. Meanwhile, in South region, Bellary it evaluated at INR 17,600-17,800/MT; price are ex-works & excluding of GST at 18%.
* Correction
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