Indian Sponge Offers Firm Despite Rising Coal Prices

Sponge offers almost remain firm in Central & East India with marginal price change of INR 100-300/MT on D-o-D & in a week period. However, during the current week global coal offers surge by US$ 6-8/MT.

Sponge manufacturers in South & East India who are largely depend on imported coal have reported that the cost of production have increased significantly. However, they are maintaining sponge offers on same level as demand yet not supported on falling billet prices in domestic market. According to the manufacturers approximately 60% input cost is from coal for production of sponge iron.

Current offers for 78-80 FeM C-DRI are hovering in the range of INR 13,100-15,800/MT (USD 195-235). However, RB2 coal offers are prevailing at US$ 93-95/MT CNF India, which was at US$ 88-89/MT in the beginning of Nov’16.

Trade Updates

Central India: large manufacturers in Raipur are offering P-DRI in the range of INR 13,300-13,500/MT ex-plant. According to the trade sources, the manufacturers are under selling pressure; if demand remains poor, prices may come down soon.

East India: Rourkela based manufacturers are offering 80 FeM C-DRI mix material in the range of INR 13,100-13,500/MT through CST billing. The manufacturers have mentioned that sales are majorly to Jalna, Nashik & Wada. Jharsugda based Shyam Metaliks heard offers P-DRI at around INR 12,700/MT ex-plant.

South India: Sunvik Steels, one of the renowned manufacturer in the region has kept offers unchanged since a week duration; 80 FeM C-DRI prices at INR 15,100/MT & 82 FeM at INR 15,500/MT ex-plant. ILC Iron & Steel in the same place who’s production is around 400 MT per day is offering P-DRI at INR 14,500/MT ex-plant.

Indian Sponge & Coal Offers as on 8 Nov’16

Source: SteelMint Research