Indian sponge iron prices have corrected lesser in a month in proportion to MS billet prices amid supply constraints in Durgapur & Raipur.
Indian semi finish market has been witnessing continuous downfall in prices since many weeks. In a month, sponge iron (C-DRI) and MS billet prices in Durgapur have corrected by INR 1,000/MT and INR 1,950/MT, and in Raipur by INR 500/MT and INR 1,400/MT respectively. But prices of both the materials have fallen by INR 1,400/MT in Rourkela. This difference in price correction is due to supply constraints in Durgapur & Raipur.
Large Capacity Sponge Producers Sell Material Aggressively
Sources revealed that few large sponge makers based in Odisha, like Rungta and Bhushan, are offering sponge iron cheaper by INR 500/MT in contrast to other sponge sellers. Currently, Rungta is offering 78 FeM C-DRI at INR 14,700/MT Ex-works (Odisha), while other manufacturers are providing the same material at INR 15,000-15,200/MT Ex-works (Odisha). And, Bushan is offering 78 FeM P-DRI at INR 13,500/MT, while other producers at INR 14,000/MT. Such competitive offers indicate that sponge prices will fall further in coming days.
Iron Ore Mines Resumption in Odisha Brings No Cheer
Increase in iron ore supply from Odisha is not much beneficial for secondary steel industry, as sponge producers have delayed iron ore buying in anticipation of further downfall in raw material prices, mentioned sources. Meanwhile, NMDC has opened its iron ore offers for the month of May’15 with no correction. However, sponge iron prices have declined by upto INR 1,400/MT in a month.
South India Based Producers Prefer Iron Ore over Pellet
In Bellary, there are limited P-DRI sellers, as most of the medium sized plant manufacturers have shifted towards C-DRI production. As of now, 82+ FeM C-DRI is offered at INR 16,100/MT and 78+ FeM P-DRI at INR 14,000/MT in Bellary.
Trade Dynamics
1. Few Iron ore mines have resumed sales in Odisha; remaining are expected to resume shortly
2. NMDC’s prices remained stable for May deliveries
3. Supply of iron ore from NMDC disturbed due to Prime Minister’s visit
4. It seems that although NMDC has kept its iron ore prices unchanged, the miner may have to reduce its prices in next month owing to continuous fall in sponge iron prices
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