Indian Sponge Iron Prices Stable despite Thin Trade

Indian Sponge prices have remained stable although trading activities are low. Unavailability and higher raw material cost have made many Sponge units to reduce their production.

Falling steel and Scrap prices in the global market hit Indian Sponge iron industry. Cheaper offers for imported Scrap and high production cost badly hit margins of secondary steel manufacturers.

Market participants do not expect for any sharp downfall in Sponge iron prices. To some extent, imported Scrap offers have shown some strength.

Key Highlights

• Supply of Iron ore may improve in Odisha as Serajuddin mines heard to have resumed operations. Current offers within state are assessed at INR 6,100/MT for Fe 63% on ex-mines basis, including royalty. Serajuddin is one of the largest operating merchant miner in Odisha
• Indrani Patnaik offers are heard to be in the range of INR 6,300-6,400/MT for screened 5-18 mm of Fe 61%
• Rungta (Odisha) is offering low grade 10-30 mm lump at around INR 5,300/MT (including royalty)
• Odisha based manufacturers are offering Fe 63% Pellet at INR 8,000/MT; buying interest observed at INR 7,700-7,800/MT
• Imported Scrap offers move up by USD 5-10/MT due to lower import from US & Europe. Current offers are assessed at USD 315/MT CIF India for HMS 1&2
• NMDC may reduce Iron lump prices owing to lower demand from Sponge & Steel manufacturers. Current prices are INR 4,400/MT for 6-40 mm; Baila lumps of grade Fe 64% (excluding royalty)
• Coal prices fall in domestic E-auction to an extent of INR 1,000/MT. Buying for imported steam Coal drops.

Trade Wise

• Vandana offering Sponge (DR-CLO; 0-20 mm) at INR 20,700/MT ex-Raipur; advance payment
• Shyam Metalics offers for C-DRI (FeM 78) remain unchanged at around INR 19,700/MT ex-Jharsuguda
• Sundargarh (Odisha) based Sponge makers offering C-DRI (FeM 79) at INR 20,500-20,600/MT; delivered to Raigarh
• Hyderabad based Sponge manufacturers are selling C-DRI (FeM 70) to Jaipur at INR 18,000/MT (ex-works); freight to Jaipur (by road) at INR 3,000/MT
• Sunflag/Llyod/ Pushpit Steel to import 1,65,000 MT Iron lump from South Africa at Krishnapatnam port. Prices are assessed for S. African lump (Fe 64%) at USD 97-98/Mt CIF India; loading in December/January

Note C-DRI- Sponge Iron produced from Iron ore
P-DRI- Sponge Iron produced from Iron Pellet