Induction furnaces prefer Scrap over Sponge iron in North India

Friday, September 17,

SteelMint Exclusive

Induction furnaces based in Mandi Govindgarh, Muzaffarnagar and Ghaziabad prefer Scrap as raw material over Sponge iron. This is primarily due to high Iron ore prices which has made Sponge iron dearer. At present, Sponge iron in Central India is being traded at Rs 17,000-17,500/MT, where as Orissa based Sponge is being priced at Rs 15,800/MT.

Landed cost of Sponge iron to Mandi, Ghaziabad and Muzaffarnagar comes up to approx Rs 20,000-20,500/MT, where as Scrap is Rs 20,500-21,000/MT. “Furnaces based in these places are running at a loss of Rs 500-800/MT; using Sponge iron will shoot up their production cost and hence will increase their losses.” said of the Ingot manufacturers based in Ghaziabad.

“Demand for Sponge iron has fallen drastically in past few weeks due to high cost. Induction furnaces in Northern India are running at 40-50% capacity.” said one of the manufacturers based in Raigarh.