Domestic sponge prices remained firm, but iron ore prices continue to decline over increased inventory. Sources say sponge prices may fall anytime soon as finish steel demand is not supportive.
Sponge iron prices are comparatively stable in contrast to decline in prices of iron ore and coal. However, market participants are anticipating a sharp fall in sponge iron offers anytime soon due to declining imported scrap offers and increase production of sponge iron.
Reason behind stability is unwillingness to cut offers as MS ingot/billet prices remained firm and there is positive sentiment in domestic market post imposition of safeguard duty. In addition, hike in Pig iron prices by INR 500-1,000/MT M-o-M is also supporting current sponge prices.
In the month of Sept’15, Odisha based miners have reduced prices by INR 800-850/MT. Meanwhile, South African coal prices have declined by USD 5-6/MT (INR 330-400/MT). But, sponge makers located in Raipur, Rourkela and Durgapur have resisted price corrections, trading at levels of INR 14,600-16,000/MT.
Alongside, easy availability of iron ore lumps at cheaper rates has shifted sponge manufacturers’ interest to produce C-DRI instead of P-DRI.
Raipur based pellet makers stated, “At current pellet offers in the range of INR 5,100-5,200/MT, we are unable to find buyers.”
South Indian market has witnessed no major fluctuation since past few weeks.
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