Indian Sponge Iron Prices down by INR 100-300/MT

Sponge iron prices across India down by INR 100-300/MT on falling demand and delay in Supreme Court interim order on mining ban in Odisha which is pending for a while. Trade sources say there is no clarity on order, according to few it may come on 17th May 2014 and few believe that it may take some time.

Strong Rupee also poise a threat to Indian Sponge iron prices, with appreciating Rupee (which has recovered to 60/USD) scrap imports are bound to rise which will put pressure on Sponge iron prices.

Current offers are prevailing at INR 22,300/MT (Ex-Raipur), INR 21,000/MT (Ex Raigarh), INR 19,650/MT (Ex-Rourkela), 20,900/MT (Ex-Bellary, 78 FeM Lumps).

According to latest report on Indian Iron Ore railway movement across India, it was noticed that total movement has dropped by 18% in April over March, 2014 largely due to transport ban in Odisha, which took place during elections.

Speaking to Sponge manufacturers, SteelMint assessed that there is some sense of confusion on mining ban in Odisha and they do not want to take positions at current levels (prices have gone up by INR 300-500/MT by few miners).

However, some say that they have increased their inventory levels to 20-25 days (which is generally 12-15 days in ideal condition).

NMDC’s recent price cut has been blessing in disguise for Sponge iron manufacturers in Chattisgarh, who have been enjoying decent profits from last few months. They claim that net landed cost of 63% Iron Ore (CLO) from NMDC costs them upto INR 7,500/MT (Ex-Plant Site, Incld Royalty) compared to INR 7,200-7,500/MT from Odisha miners for almost same grade and quality.