Indian Sponge Prices decline by INR 300/MT W-o-W; Buyers Skeptical

Sponge iron market has witnessed a slight correction ranging between INR 200-600/MT W-o-W. Major decline of INR 600/MT is witnessed in Raipur market.

Sponge iron prices have declined by INR 200-600/MT W-o-W because of low buying from North & West India. While, pressure on manufacturers has begun to mount in Central India.

Imported Scrap Supply will increase in March/April

Sponge iron prices may witness some pressure due to expected increase in imports during March/April. Participants reported that importers took decent position during Feb’15 when prices were at low levels and for which deliveries will be made in March and April. However, Scrap imports have fallen by 14% in Feb’15 against Jan’15.

Increased Availability of Imported Scrap in North India

The prime reason behind pressure on Sponge prices is increased availability of imported Scrap in North & West India. SteelMint noticed that delivery of imported Scrap, which was booked in Feb’15 at an average price of USD 290-310/MT (Shredded Scrap), has started this month. Present offer of HMS is hovering in the range of USD 270-275/MT, CIF Mumbai and Shredded at USD 290-295/MT; delivery in Apr’15.

Trade-wise

• Chhattisgarh based manufacturers prefer NMDC’s Iron ore over material provided by Odisha miners due to low cost and fast delivery. In Mar’15 (till 11 Mar’15), 32 rakes have been dispatched from NMDC to Chhattisgarh based units against 40 in Feb’15
• Selling pressure on Sponge iron is increased in Central India. 81-82 FeM DR-CLO lump is heard to be at INR 19,000/MT levels in advance payment by few sellers
• Vandana is offering 81-82 FeM DR-CLO (0-20 mm) at INR 19,200/MT and 79-80 FeM C-DRI at INR 18,700/MT
• Durgapur based Sponge manufacturers prefer Iron ore due to better availability and realization over Sponge pellet prices. Few sellers are offering C-DRI at INR 18,300/MT and P-DRI at INR 16,600-16,800/MT in advance payment
• A well-known manufacturer based in Southern India is offering 77 FeM P-DRI at INR 15,800-16,000/MT, ex-Bellary
• Sesa Sterlite has resumed mining operation in Karnataka. Iron ore prices may correct in the state