Indian Sponge iron (DRI) prices moved up sharply in last few trading sessions on restricted supply of Iron ore from largest Iron ore producing state Odisha, which is facing complete halt in transportation on account of elections.
Sponge iron prices have shot up by USD 20/MT in last one week and currently being offered at USD 330-360/MT on Ex-Works basis.
However, market participants accept that prices have gone up unexpectedly high and may resist at current levels once transportation gets normal (after 18 Apr, 2014).
In line with rising Sponge iron prices, which contribute almost 25% of steel making in India, the offers of domestic & imported Scrap have also gone up by USD 10-15/MT.
India is the largest Sponge iron producer with an annual production of 23 MnT as compared to an installed capacity of 45 MnT. India is also the third largest importer of Scrap after Turkey & South Korea. The country imported around 7 MnT of Scrap in FY13 and around 4.5 MnT in FY14.
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