Even as the production of sponge
iron in Odisha has gone down drastically following lower availability of raw
material, the prices have not reacted accordingly due to dull demand. The rates
are seen stabilising at current levels for another three months, said industry
officials and experts.
High grade sponge iron has been
trading around Rs 21,700 per tonne including taxes at main hub Rourkela for
past three months, in spite of production falling to nearly 100,000 tonne per
month in the same period, lower than 200,000 tonne a month produced during
April-May.
“The slump in real estate
market has affected the sponge iron demand severely as 90 per cent of the
industry in Orissa caters to production of TMT bars and rods. The prices are
moving in a very narrow range of Rs 21,500 to Rs 21,700 per tonne since October
and I do not think it will go up until March 2012,” said Pradipta Mohanty,
chairman of Sundergarh-based Vishal Metallicks.
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