Sponge iron prices in Southern India likely to remain under pressure

Sponge iron (P-DRI) prices in Bellary fell by INR 1,250/t to INR 25,000/t exw in the last two weeks, as per SteelMint assessment. Officials from BMM Ispat, one of the major sponge producers said that the prices declined due to an increase in scrap supply from Indian Railways followed by a decrease in billet prices of Hyderabad by INR 1,500/t on a weekly basis. The landed cost of scrap in Hyderabad is reported at around INR 30,500/t with a metal recovery of 95-97%, which is much cheaper than melting sponge iron. Hence, sources believe that sponge iron prices are likely to remain under pressure amidst sufficient stock with manufacturers.