Despite of high fluctuation in steel market, brokers believe that sponge iron prices are unlikely to correct soon due to acute shortage of Iron ore.
Sponge iron prices are stable from quite some time and are expected to remain stable due to acute shortage of Iron ore. Availability of iron ore from Orissa has dried out after the mining authority stopped issuing transport permits to sponge iron manufacturers.
Iron ore availability in Karnataka is also limited and supply is expected to remained tight in near term, said market participants.
” Supply of Iron ore has dried out at this moment and will remain tight for next few days.Coal prices are also rising up. So, these factors will lend support to sponge iron prices. M S Scrap is in demand as most of the induction furnaces are diverting from expensive sponge iron to comparatively cheaper scrap.” said Mr Alok Agrawal, a sponge manufacturer based in Chattisgarh.
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