Brokers & Manufacturers anticipate that there is limited probability for market to slope down as no correction is seen in Sponge prices. Across India, Sponge iron prices remain stable at INR 21,000-24,000/MT.
North India based semi finish (Ingot/Billet) manufacturers have scaled down the production continuously owing to scarcity of Scrap and low profit margin in furnaces. Few years ago, Punjab (Mandi Gobingarh) was a major steel hub of North India. As per estimation, 60-70% of production has scaled down in North India from past few years as small unit started to shut down owing to non availability of raw material (Scrap). North India manufacturers prefer to buy MS Ingot/Billet from Central & East region as they have cheaper Sponge iron and power charges. Sponge iron production increases along with Iron ore production and made the East & Central India, the biggest supplier of crude steel to North India.
High prices in Central & Eastern India halted the supply to North India.
Mining ban in Odisha has shot up the prices by INR 1,000-2,000/MT pan India. In line, Ingot offers in Mandi have also raised by INR 1,000-1,500/MT from past few days. However, due to negative sentiment in finish buying, MS Ingot/Billet prices seen correction by INR 200-500/MT. But experts believe that high raw material prices will keep the finish prices up and production will come down.
“Viability from Durgapur, Rourkela & Raipur to North India is low as per current offers. There is limited possibility of price correction here in local market. It is expected that market likely to increase again or will range bound,” said a broker, which is the supplier of MS Billet & Sponge iron from Eastern & Central part to North India.”
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