Indian Sponge Iron Market Observes Low Trades

Indian Sponge iron prices rigorously dropped by about INR 200-600/MT (USD 3-9) in current week owing to rising selling pressure, falling raw material and finished steel prices in domestic market.

Industry experts believed that, sponge prices may remain under pressure due to poor off-take on account of financial year closing amid seasonal better productions and slow down demand in finished steel.

As per the price assessment, current offers for Pellet sponge (P-DRI) is about INR 18,400-18,500/MT ex-Raipur, INR 18,500-18,600/MT ex-Durgapur and INR 18,600-18,800/MT ex-Bellary for 78-80 FeM grade.

Central India based trade participants stated that, prices are less likely to find support as selling pressure rising among sponge & pellet makers. This may lead to further price corrections as demand from the Billet manufacturers is also limited.

Further, the participants from eastern region - Odisha reported, very limited buying at the prevailing offers of INR 18,800/MT (ex-plant) for 70:30 mix material, C-DRI sponge.

In addition few of 100-300 TPD sponge iron manufacturers based in Rourkela, Odisha said that they are eyeing for correction in prices of Odisha merchant iron ore miners. It is to be noted that only Essel Mining had cut iron ore offers, while others continued to hold offers unchanged. Major miners like KJS Ahluwalia, Kaypee Enterprises, KN Ram and Indrani Patnaik were not active in the markets as they had done with their EC limits for the running financial year.

Also added that, limited demand from Western India (Jalna) and from North-east regions which piled up inventories more than average, this may result price fall in coming days.

However manufacturers based in Southern India, Bellary mentioned that, prices have touched at bottom line, further fall is dependent on raw materials. Although sales reported on average basis.

-- BMM Ispat, one of the major sponge producer in Bellary, having capacity to produce 2,300 TPD (0.7 MnT pa) sponge. The company is offering FeM 80 P-DRI lump at INR 18,700/MT ex-plant. While another few small sized mills offer reported in the range of INR 18,400-18,500/MT for the same grade material.