Today the domestic sponge offers fell by INR 100-400/MT against last day trade. Offers fell owing to weak semis movement & currency demonetization.
Currently, offers for 78-80 FeM C-DRI have reached at INR 14,200-14,400/MT ex-Raipur, INR 13,000-13,200/MT ex-Rourkela, INR 13,300-13,400/MT ex-Durgapur and INR 14,800-15,000/MT ex-Bellary. Meanwhile, P-DRI offers are hovering in the range of INR 12,600-15,200/MT ex-works.
Sources mentioned that inventory levels to the sponge manufacturers are rising continuously. Raipur & Bellary are majorly sell material to West India and due to post currency demonetization hot rollings & standalone billet plants in the region have halted sponge purchases. Similar situation is being analyzed in Rourkela which largely supplies sponge to North East region and currently not getting any major bookings. Thus, supply chain of sponge iron is disturbed and this has led to rise in inventory levels.
In outlook market players are assuming for further price pressure on sponge iron due to poor sales and less production by Ingot/billet manufacturers.
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