Indian sponge iron export offers to Bangladesh have increased by around USD 25/MT on SteelMint’s weekly price assessment. This hike in export offers is supported by high Indian domestic offers which rose by about INR 1,000-1,500 (USD 15-23) during the same time.
The latest export offers for 80 FeM sponge lumps by Durgapur- East India based manufacturers are reported at USD 375-380/MT which until last week stood at around USD 350/MT; CPT Benapole (land port of Bangladesh and India). On CFR basis, the offers would reach USD 390/MT, CFR Chhittagong, Bangladesh.
“Recently a small deal of about 500 MT has been concluded at USD 375/MT CPT Benapole,” stated a producer based in Durgapur who usually sells sponge for exports.
Few of the exporters also mentioned, that buying interest is largely through road route (via Benapole port) rather than sea route (through Chhittagong port) due to short clearance time of about 10-15 days.
Imported scrap offers to Bangladesh increased further by around USD 10-15/MT W-o-W basis. Latest offers assessed at around USD 370/MT for HMS 1&2 from US and UK origin and USD 390-395/MT for Shredded 211 from US, CFR Chhittagong. According to trade sources, the buying interests at these offers are limited.
Trade activities silent in India
With the significant surge in sponge offers, trade activities in Indian domestic market have slowdown presently and are expected to remain weak as buyers are cautious. Owing to the presently prevailing high offers market players are looking to wait and watch to take positions.
The domestic offers for 78-80 FeM Sponge iron lumps grade are hovering at around INR 21,800-22,000/MT (USD 340-345) ex-Durgapur & INR 20,700-20,900/MT (USD 323-327) ex-Rourkela.
Reasons behind rise in domestic prices
— Acute shortfall of railway rakes meant for carrying iron ore and coal. A large number of rakes are being diverted to meet coal requirement of thermal power producers.
— Lower imports of scrap owing to higher global prices. Imports have dropped by about 16% in first 9 months of CY17 (Jan-Sept) and stood at 3.60 MnT against same preceding CY16 at 4.29 MnT.
— Rising billet exports from India at higher prices giving support to sponge iron prices.
— Rising iron ore prices by merchant miners.
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