Indian Sponge Manufacturers Remain Under Pressure
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Indian sponge market is drifting continuously, sources reported that trade volume remains thin. Analyzing the same, few manufacturers in South India have reduced production to balance demand-supply.
Presently, domestic offers for FeM 78-80 sponge C-DRI are assessed at INR 13,500-16,300/MT (USD 209-253) ex-works. While, export offers by East India based manufacturers are at USD 280-285/MT CPT Benapole port, Bangladesh.
In Raipur, Central India & Rourkela, Eastern region the trade participants have mentioned that there is no major purchase by out state based buyers, dealing only with domestic buyers. Hence, selling pressure are high, which resulted in steep corrections in prices.
Although, the sources in South India reported production cut by few renowned manufacturers by approximately 50% over surge in inventories as well lower selling prices. The plants name mentioned by sources are - ILC Iron & Steel Ltd (350 TPD), Prakash Sponge (200 TPD) and few more medium size sponge makers.
BMM Ispat, a key price trend setter in the South region which installed capacity for sponge iron at 2,300 TPD has also reduced output by 50%. The plant's offer for 80 FeM P-DRI are assessed at INR 15,100/MT ex-plant.
In context to raw materials, Indian iron ore prices are firm currently post decline by INR 100-300/MT in the beginning of May'17. Whereas, in week duration RB2 South African Coal offers fell by USD 3-5/MT to USD 70-71/MT, CNF India.
Domestic sponge offers as on 16 May'17
| Particulars | C-DRI | D-o-D | W-o-W | M-o-M |
| Ex-Durgapur | 15,150 | - 200 | -550 | -2,450 |
| Ex-Rourkela | 14,100 | - 200 | -600 | -2,500 |
| Ex-Raigarh | 14,500 | - 500 | -1,000 | -2,500 |
| Ex-Raipur | 15,500 | 0 | -1,000 | -2,100 |
| Ex-Bellary | 15,400 | 0 | 0 | -2,600 |
| Ex-Hyderabad | 16,300 | 0 | -100 | -2,200 |
Prices in INR/MT
Source: SteelMint Research
Trade Log
1. OCL Iron & Steel in Odisha is offering C-DRI at INR 14,000/MT and INR 23,000-23,200/MT for billet ex-plant. A official from the company shared, limited buying interest at this quoted price.
2. Rashmi Metaliks in Durgapur, West Bengal on 16th May is not offering sponge in open market due to bottomed out prices, a official mentioned.
3. Odisha based Jay Jagannath Steel & Power, who are largely supply sponge to North & Western India, offering FeM 80 C-DRI lumps at INR 14,600-14,700/MT ex-plant.
4. Bhaskar Steel is offering billet at INR 23,200/MT and FeM 80 C-DRI mix material at INR 14,200/MT ex-plant, Odisha through CST billing.
5. Sources reported, Monnet Ispat is offering sponge P-DRI at INR 13,800/MT and C-DRI fines at INR 14,600/MT ex-plant, Raigarh. Another, large manufacturer namely Singhal Steel is offering P-DRI at INR 13,600/MT; trade activities are less at these offers.
6. Karnataka based Sunvik Steel kept offers unchanged for FeM 80 C-DRI at INR 16,200/MT ex-plant. While, in same place Prakash sponge sold same grade material at low price of INR 15,300/MT ex-plant.
