In conversation with participants SteelMint learned that, sponge prices in southern region of India – Karnataka may come down or find stability over improved supply of raw materials.
Couple of manufacturers who have installed capacity of sponge around 1,000-2,000 MT per day stated, “dispatches of raw materials (Iron ore) resumed, which was hindered from last few weeks, as DMG (Department of Mines and Geology, Govt of Karnataka) has made changes on their software system, which is an online portal through which iron ore is transported.”
Hence, anticipations are high with healthy availability of Iron ore, prices of sponge iron and raw pellets will gradually come down.
Another, billet cum sponge manufacturer in Bellary (Karnataka) quoted, “as of now offers of pellets are in the range of INR 7,400-7,500/MT, however buying interest is at INR 7,000-7,200/MT (ex-plant)”.
It should be noted that, with resume transportation of Iron ore, fresh bookings for pellets are on hold by sponge makers and also they reduced sponge prices by INR 200/MT today. However despite price reduction, no major trade activities were reported as elections are going on today (18th of April) in Karnataka.
SteelMint’s assessment for 78-80 FeM coal based Sponge C-DRI are reported at INR 19,700-19,900/MT (USD 245-255) ex-plant. Inline P-DRI prices are assessed at INR 19,300-19,400/MT for 79-80 FeM grade on ex-Plant basis in regular payment. However few deals are concluded at INR 19,000-19,200/MT on immediate payment, sources added.
Meanwhile in Hyderabad (South India), the manufacturers have also reduced Billet offers by INR 500/MT to INR 32,500/MT ex-plant & excluding GST.
In addition sources reported, in western India, which is the largest buyer of sponge from southern region, has imported a bulk vessel of 21,590 MT HBI (Hot Briquetted Iron) from Iran; material was booked at USD 224-227/MT, FoB Iran. It seems, it will impact sponge iron demand in domestic market.
Karnataka – the third largest sponge iron producing state in India with an annual contribution of 9-10% in country’s total DRI production of around 27 MnT. The manufacturers in Karnataka are largely supplying about 40-50% material to western region and remaining is sold in local & surrounding markets.
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