Indian Pellet Sponge Prices Decline Sharply by INR 400-500/MT

Domestic pellet sponge (P-DRI) market has witnessed fall in prices; Durgapur by INR 600/MT, Rourkela by INR 800/MT and Raipur by INR 200/MT.

C-DRI prices in Odisha, India’s largest sponge maker with an installed capacity of 11 MnT, have declined sharply by INR 800/MT. And in Durgapur, sponge iron prices fell by INR 600/MT. However, Chhattisgarh, India’s 2nd largest sponge maker with an installed capacity of 9 MnT, has witnessed a minor correction of INR 200/MT in prices.

The major cause of price correction in Odisha and West Bengal is price cut by Odisha miners; fines by upto INR 200/MT and lumps by upto INR 700/MT in May’15. Sources revealed prices may come down further by INR 200-300/MT due to low sponge prices. However in Chhattisgarh, prices declined slightly because of no correction in NMDC’s iron ore prices for May deliveries.

It is to be noted that out of the total sponge requirement, Chhattisgarh based sponge manufacturers purchase 55-60% of iron ore from NMDC (CG) and rest from Odisha.

Currently, MS billet offers in Duragpur are assessed at INR 25,000/MT, Rourkela at INR 24,700/MT and Raipur at INR 25,700-25,800/MT.

South Based Sponge Makers Looking for Bulk Deals

SteelMint while talking with sellers, who deal in bulk quantities, assessed sponge buying in bulk quantities from other states is not viable in South market because of continuous fall in prices amid surge in production. Currently, 78 FeM C-DRI is being offered at INR 15,300-15,500/MT and 82 FeM at INR 16,100-16,300/MT. However, buyers are willing to purchase the material at INR 200-300/MT less than the offered price.

Semi Finish Prices as on 28 May’15

Basic prices in INR/MT on ex-works basis
*Delivered/FoR
Source: SteelMint Research