Monday, July 04,
Sponge prices traded steady during last one week, prices at physical markets remained stable despite high fluctuations in Ingot prices.
Market participants expect that sponge prices might sustain at these levels and a correction of Rs 500-800/ ton is expected in near term. Reasons sought are
1) Opening of mines which were closed on violation of forest laws, this will increase the supply of Iron Ore in the market.
2) Local mining authority in Orissa have started clearing licences of manufacturers and traders which were suspended few days back.
3) Most of Ingot manufacturers have stopped production at Rourkela over hike in electricity charges, which will reduce the demand of sponge in that sector and will increase the supply.
4) The timeline for resolving Karnataka iron ore situation is approaching and 15th July is the due date, after which the market is expected to correct by Rs700-800/mt in souther sector.
Sponge prices currently hovering around Rs 20800/ton (Basic) at Raipur, where as Bellary is quoted at Rs 18300/ton (Basic).
Reported by Meghna Verma (meghna@steelmint.com)
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