Sponge iron prices gain further on raw material supply concerns

Sponge iron ore prices
moved up by Rs 100-200/MT at few mandis' like Raigarh, Mandi Gobindgarh and
Duragapur. Shortage of iron ore is still a major cause of concern for almost all the sponge
iron manufacturers.

According to reports, the Supreme Court's environment panel,
Central Empowered Committee (CEC) has recommended an extension of iron ore
mining ban to the districts of Chitradurga and Tumkur in Karnataka. Initially, the
Supreme Court had put a ban only in the district of Bellary.

This might further tighten the supply of iron ore in Karnataka
and most of the plants might go for a complete shutdown or look for alternative destinations to source iron ore. However, sourcing of iron ore from other places will definitely increase their production cost & squeeze their profit margin. 

Comment by:

Manufacturer, Bellary: “We
are already running at very low capacity and can't sustain long with the available
iron ore with us. We are eagerly waiting to see what Supreme Court decides when
the matter is heard and expect for some relief as soon as possible”