India: Sponge iron export prices gain on iron ore, lower output

Indian sponge iron export prices moved up by $ 5-10/t w-o-w on lower output and rise in iron ore prices.

Fresh export deals for around 5,000 t sponge C-DRI (80 FeM, 100% lump) were assessed at $245-250/t CPT Benapole, equivalent to $268-270/t CFR Chittagong. Last week, a similar volume was reported to have been sold at around $240/t CPT Benapole, equivalent to $260/t CFR Chittagong, Bangladesh.

There is a seasonal shortage of sponge iron due to less production in the monsoon months, which has lifted both domestic and export prices.

Higher iron ore prices in the domestic market has also supported sponge iron. Few market participants are of the opinion that iron ore prices in Odisha may rise as most of the merchant miners have halted fresh bookings, citing less extraction of iron ore due to rains and sufficient pending orders.

Rising prices of global iron ore may also spur further increase in Indian ore prices, which will likely be passed downstream by sponge iron manufacturers.

Indian sponge iron prices are expected to remain firm, with likelihood of further price gains especially in eastern India where producers have sufficient orders in hand while output takes a seasonal dip.