Iron ore prices in India which have not seen correction for last many months is under pressure on falling sponge prices, high power cost and proposed hike in coal prices by Coal India.
” Number of queries have come down from sponge manufacturers, though low production of iron ore in Odisha give thin chances of any correction.” said market sources.
Buyers are not willing to pay high on correcting steel prices and high power cost across various states.It is also reported that NMDC has increased supply quota for sponge plants based in Chattisgarh and if sources are to be believed NMDC likley to roll back the recent hike of 400-500/t.
If we consider southern India which contributes around 15-20% of sponge capacity, is also facing severe crisis as manufacturers complaint of inferior quality and unavailability of iron ore in auction.
” Sponge prices are have not seen any improvement despite high iron ore prices. Power cuts in Hyderabad and hike in power rates in Tamil Nadu, Andhra and Goa have kept demand low.” said a sponge manufacturer based in Bellary.
Considering entire scenario we can conclude that rising input cost of iron ore, power and coal, sponge manufacturers have to compromise on their margins. And industry do not see expect any correction in iron ore prices.
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