Domestic semi finish makers have been under persistent pressure since few months. However, post the festive end, prices have started to stabilize in domestic market. Trade participants anticipate that prices may find some strength in near-term.
It is to be noted that in two months of Q3 FY16, semis prices have declined by INR 2,000-3,000/MT. While, iron ore prices have fallen slightly by INR 600/MT in the duration. As a result, profit margins of manufacturers has narrowed down to large extent; pushing producers either to shutdown their mills or curtail production.
Few sources reported that if prices continue to be stable, positive sentiments may prevail in the market. Alongside, upcoming holidays in global market and winter season may also help Indian steel industry as dispatches of imported material will get halted for some period.
DR-CLO sponge iron production may vanish quickly
Raipur (Chhattisgarh), one of the major sponge iron suppliers and producers, has registered fall in DR-CLO sponge production amid higher NMDC’s iron ore prices compared to other Odisha based miners.
“Many sponge maker shifted to local iron pellet or Odisha iron ore. NMDC’s DR-CLO grade sponge iron sellers are only 1-2, which are also to close DR-CLO feed”, shared a sponge agent located in Raipur.
As per railway rake movements tracked by SteelMint, iron ore dispatches from NMDC to a large sponge maker in Raipur has decreased to a single rake in Nov’15 (till date), which used to around 20 rakes every month.
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