In a week’s duration sponge prices in all major markets increased by INR 800-1,500/MT (USD 11-22) and the major rise of INR 1,500/MT was seen in Central India- Raipur. Last week SteelMint had reported that Indian Sponge iron prices seems to remain supported, and prices are likely to increase over better demand amid reduced supply.
Central India based manufacturers reported limited supply in merchant market due to increased captive consumption and with falling production due to monsoons. On an average, supply in merchant market fell about 20% as reported by major sponge manufacturers. Today the prices increase by producers by INR 400-500/MT and the offers for Sponge P-DRI assessed at INR 21,700-21,900/MT and for DR-CLO grade at INR 24,000-24,200/MT; ex-plant & excluding GST.
Sources reported few Central India, Raipur based smelters purchased Sponge C-DRI lumps from Odisha at INR 23,000-23,200/MT on FoR basis.
Similarly, in East India – Durgapur & Odisha, where offers increased by INR 700-1,000/MT in a week, as per the current scenario only few large manufacturers are dealing with merchant market over less production due to the ongoing monsoon season. The current offers for Sponge C-DRI hovering at INR 22,500-22,600/MT in Durgapur & INR 21,300-21,500/MT ex-Rourkela, for 78-80 FeM, mix material.
Further, in Southern region – Bellary based Sponge manufacturers reported that buying inquiries spurt from Hyderabad & Hindupur with an surge in Billet offers on improved procurement from Chennai based re-rollers. The billet prices in Chennai hovering at INR 35,500/MT & in Bellary about INR 34,500/MT both are ex-works & excluding GST.
BMM Ispat the largest producer of Sponge iron in Karnataka has increased prices by INR 500/MT to INR 19,500/MT (ex-plant), for P-DRI lumps, FeM 80.
Outlook of market participants is that there are less possibilities for decline in sponge prices in near term looking at current demand-supply dynamics where supply is less while demand remains continuously supported.
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