Eastern India: Sponge Iron Offers Drop Sharply on Improved Supply

Sponge iron prices in eastern India - Durgapur have dropped sharply by INR 1,000-1,200/MT (USD 14-17) W-o-W. However in the same duration it plunged about INR 200-600/MT in remaining parts of the country.

SteelMint learned that, improved supply amid weak demand in domestic & exports led to significant drop in price range in eastern region. As per sources, couple of major sponge producers in Durgapur had lowered supply during mid of Sep'19. However after that they fully resumed supply, putting prices under pressure.

In Durgapur offers for FeM 78 Sponge C-DRI (mix material) reported at INR 17,000-17,200/MT & P-DRI at INR 16,000-16,200/MT; slump by INR 1,000-1,200/MT. Meanwhile offers for FeM 79-80, Sponge C-DRI in Rourkela, Odisha hovering at INR 16,600-16,800/MT ex-plant; dropped by INR 200-400/MT, W-o-W.

Also raw material prices are on down trend, as recently Odisha's major merchant iron ore miner - Serajuddin has cut iron ore lump offer by INR 300/MT to INR 3,400/MT for 5-18 mm (Fe 63%), ex-mines (including Royalty, DMF, & NMET).

Export offers of Sponge iron have narrowed down recently by USD 5-10/MT due to lessened booking by Bangladeshi mills and currently evaluated at USD 270-275/MT CPT Benapole, equivalent to USD 285-290/MT CFR Chittagong, Bangladesh.

Coming to price movement in central India's domestic sponge market, where selling pressure increased with the producers & offers marked fall of INR 600/MT in a week with fresh deals at INR 16,000/MT for P-DRI, ex-plant.

Meanwhile in southern India, demand remains firm. However due to falling billet prices, sponge being corrected by INR 200-300/MT in a week and currently stood at INR 16,300-16,400/MT for P-DRI.

The standalone sponge producers in Bellary cited short supply of iron pellets in merchant market due to shutdown plants of BMM & MSPL over planned maintenance work. Hence they expect sponge iron prices to remain firm.