There were no fresh deals in sponge iron exports since more than a week’s time due to disparity between bids & offers, stated market sources. There is gap of USD 5-10/MT between bids & offers.
As per conversation, the fresh quotation for Indian Sponge C-DRI exports (79-80 FeM, 100% lumps) hovering at USD 275/MT CPT Benapole (dry port of India & Bangladesh), equivalent to USD 285-290/MT CNF Chittagong, Bangladesh.
Meanwhile the buying interest reported not more than of USD 270/MT CPT Benapole & close to USD 280-285/MT CNF Chittagong.
Hence the buyers are in wait & watch mode, resulting in slowing down of exports of Indian sponge iron.
SteelMint analysed that, demand is better in Indian domestic market amid good realisation, thus suppliers (manufacturers) are not willing to deal in exports amid low margins.
On an average, the Odisha based manufacturers are dealing in domestic market for sponge C-DRI (79-80 FeM, 100% lumps) at around INR 16,800-17,000/MT (USD 244-248) ex-works. However if they will go for export bookings on buying inquiries, the realisation will be around INR 16,000/MT (USD 233) on ex-works basis.
Logistic cost via road from eastern India, Odisha & Jharkhand to Benapole (dry port of India & Bangladesh) is about INR 2,500/MT (USD 36), as per exporters in Kolkata.
Why have mills lowered bids for sponge iron ?
SteelMint observed that, the local steel demand in Bangladesh has worsened due to monsoon season and upcoming Eid festival in the country.
Also as per sources, the standalone steel mills in Bangladesh have reduced production near to 30-40%, this is resulting falling raw materials demand.
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