Indian Sponge Iron Market Remains Weak

Manufacturers prefer to produce C-DRI over P-DRI due to unchanged pellet prices.

Indian sponge iron prices have remained almost the same in the major markets. Currently, C-DRI 78-80 FeM is being traded at INR 14,800-17,000/MT, ex-works. While pellet sponge is being traded at INR 13,800-15,000/MT.

In conversation with manufacturers, SteelMint assessed that merchant sponge makers who are producing pellet sponge are facing difficulties owing to stability in Pellet prices. Manufacturers are planning to make C-DRI over P-DRI owing to high premium of INR 1,800-2,000/MT on C-DRI and bulk buying of C-DRI in the local market.

Demand of P-DRI in the local markets remains stagnant as compared to bulk buying from other states. In the previous week, few big deals concluded from central and south to the western market. The deals from south took place at around INR 14,000/MT and from central at INR 14800/MT, on ex-works basis.

Future outlook
According to market participants, prices of sponge will remain stable for the current week because of power shortage in the markets as well as roll over of iron ore prices by Odisha miners.

Trade Highlights
1. Aryan Ispat offered P-DRI (79 FeM) at INR 14,200/MT Ex-Jharsuguda (Odisha); freight to Raipur by road is at INR 600/MT.

2. A large sponge maker based in Bellary is offering P-DRI (77 FeM) at INR 14,000/MT ex-works; mostly material being sold to to Jalna (Western India).

3.P-DRI (77 FeM) in Raigarh is being offerd by a well known manufacturer at INR 13,600/MT while one another manufacturer is offering P-DRI (79-80 FeM) at INR 14,200/MT ex-works.

4. Odisha based major merchant miners have kept iron ore prices unchanged as of now.
Pellet prices in Raipur have remained unchanged since a month while in Durgapur they corrected only by INR 400/MT.

Semi Finish Prices as on 1 June’15

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