Indian sponge iron is currently trading at INR 15,000-17,500/MT after correcting by INR 300-800/MT in last one week. Furnace operators are may reluctantly correct offers further from current levels.
Indian sponge makers are reluctant to cut offers. However, owing to NMDC’s ore shortage and deferred delivery of previous orders, they might have to take that step. Also, even as prices corrected by INR 300-800/MT in past week, it will be difficult for sponge producers to not reduce prices, as pressure on them has mounted due to continuously falling MS billet & Pig iron prices.
Central & East India Sponge Producers may Reduce Offers
Pig iron prices, which have declined by INR 200-400/MT in Central India, has put sponge manufacturers based in Central & East India under pressure. It is anticipated that manufacturers will reduce prices in coming days. Currently in Central India (Raipur), 80-82 FeM C-DRI is being traded in the range of INR 16,500-17,600/MT and 80 FeM P-DRI at INR 14,900/MT.
In East India (Rourkela & Durgapur), 78 FeM C-DRI prices are hovering in the range of INR 15,000-16,800/MT, with a major fall of INR 800/MT W-o-W in Durgapur. While, pellet sponge (P-DRI) prices are in the range of INR 13,800-14,800/MT; witnessing fall of INR 500/MT in Durgapur.
Production Increases in South Market
In general, South market sells over 50-60% of sponge iron to West market. However as per SteelMint anlysis, out of 90 sponge iron units in South, only 40-50 units are running. The plants were shutdown from quite a long time due to non-viability and iron ore shortage. Now, the mines have resumed and as a result, sponge production has surged in South India.
Currently, 78-82 FeM C-DRI prices in Bellary are in the range of INR 15,350-16,000/MT and 78 FeM P-DRI at INR 14,350/MT. While in Hyderabad, 77 FeM P-DRI is offered at INR 15,000/MT with a price correction of INR 500/MT W-o-W.
Trade Highlights
1.Sources confirmed that Jharsuguda based largest sponge manufacturer Bhushan Power is continuously supplying P-DRI to Maharasthra in bulk at INR 13,500-13,700/MT ex-works.
2.Iron pellet prices cut by INR 200/MT in Odisha and by INR 500/MT in West Bengal in last 10 days.
3.Pig iron manufacturers in Chhattisgarh and West Bengal reduced offers by INR 200-600/MT W-o-.
4.Raipur based induction operators are continuously buying sponge iron from Odisha owing to cost being cheaper by INR 200-300/MT against offers of local sponge makers. Present sponge fines offers are assessed at INR 16,500/MT FoR Raipur and lump at INR 17,000/MT FoR.
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