Domestic sponge market has improved steeply as prices jumped upto INR 1,300/MT, trading at 1-month high. INR depreciating 66 per USD, which kept scrap importers away from market, and expected imposition of safeguard duty have acted as catalysts strengthening sponge prices in market.
Sharp hike in prices has given an opportunity to manufacturers for bulk dealing, which in turn has provided relief to them after a long time.
It is to be noted that if sponge prices further gain by INR 500-800/MT, they will reach a 3-month high. However, as per present production and demand scenario, market participants expect prices to be range bound from this level.
Pellet sponge market also witnessed a sharp hike of INR 1,600/MT in a week, leading to surge in iron pellet prices upto INR 450/MT. Alongside, pellet makers in Odisha are receiving good bookings from pellet sponge manufacturers.
“It will be too early to comment on iron ore prices in Odisha. Although, sponge prices has increased sharply, miners also have high level of inventory”, said a Durgapur based sponge manufacturer.
A Raipur based market participant also shared, “Due to sharp hike in semi finish prices, there is less expectation for price correction in iron ore.”
He further added that due to production cut (plant maintenance) by few large pellet makers in eastern belt, iron ore demand may improve in near-term.
C-DRI and P-DRI prices as on 25 Aug’15
| Particular | C-DRI (FeM) | W-o-W | P-DRI (FeM) | W-o-W |
| Ex-Durgapur | 15,500 (78) | + 1,300 | 14,500 (78) | + 1,600 |
| Ex-Rourkela | 14,400 (78) | + 950 | 13,200 (78) | + 550 |
| Ex-Raipur | 16,000 (80) | + 800 | 14,250 (80) | + 1,050 |
| Ex-Bellary | 13,800 (78) | + 150 | 13,100 (78) | + 200 |
| Ex-Hyderabad | 15,800 (82) | – 100 | 14,000 (77) | 0 |
Prices in INR/MT; ex-works
Source: SteelMint Research
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