Indian Sponge Iron Prices Likely to Remain Supported
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Indian sponge iron prices have exhibited volatility by INR 200-500/MT since couple of weeks over moderate demand and slight change in raw material & substitute products prices, as per assessment made by SteelMint.
In conversation with several industry experts, SteelMint analysed that the prices have less scope to fall significantly and following are the key attributes which may support the sponge iron prices in coming few days.
Stability & Improved demand of raw materials:
-- NMDC Ltd has rolled over in it's iron ore prices for May deliveries. As per sponge manufacturers in central India, they have made decent bookings. The miner had also roll over Iron ore base prices for both fines & lumps at NMDC Kumaraswamy e-auctions in Karnataka .
-- Odisha Mining Corporation (OMC) has being unaltered base price for upcoming e-auction for 430,000 MT iron ore fines on 07th May'19.
-- Recent pellet export bookings - Bajrang Power & Ispat based in Central India, has concluded two pellet export deals of 50,000 MT each at USD 117/MT CFR China. Following this, supply in merchant market through the producers limited.
-- Domestic pellet bookings in recent prices - After Raipur based pellet makers lowered offers by INR 100/MT to INR 6,300/MT (ex-Raipur), nearly 15,000-20,000 MT pellets has been booked by Raipur based sponge makers.
-- Improved demand for fines export - Demand for low grade iron ore fines continues to remain robust from Chinese steel mills & deal concluded low-grade iron ore fines (Fe 58/57%) to China last week at around USD 56-58/MT FoB India for May'19 loading. The prices have increased by around USD 6-8/MT since the last couple of weeks.
Volatile prices of substitute products:
-- Since more than a week, melting scrap prices are volatile in Indian market by INR 200-400/MT in line with average demand-supply. Also the pig iron prices maintained stability at current circumstances. Scrap, Pig iron & Sponge iron are the key substitutes for Ingot/Billet manufacturers, depends on the cost, the furnaces change their melting proportion of respected products.
Subdued demand
-- As per 300-500 TPD sponge makers, demand is not up to the mark, however inventories being stated on average basis. In Odisha & West Bengal - Eastern India, the producers indicated that, once demand pick, prices to find support.
In line Central & South India, the producers are not in hurry to deal as they have sufficient orders in hand. Also as the raw materials are steady they are looking future bookings on higher price range.
The latest offers for Sponge P-DRI is hovering at INR 18,800-19,000/MT ex-Raipur, INR 18,200/MT ex-Raigarh - Central India, INR 18,000-18,200/MT in Durgapur - East India & INR 18,700-18,900/MT ex-Bellary - Southern India, excluding 18% GST.
