Makers see sponge iron prices range-bound till June

Sponge iron producers expect the rates to remain at the current level until the first quarter of the next financial year on poor demand and inferior quality ore from key producing regions. The prices are Rs 18,700 to Rs 20,500 a tonne at key eastern markets, the largest producing region.

“I do not see any major demand uptick for sponge iron soon,” said D P Deshpande, managing director of Tata Sponge Iron.

Sponge iron is deoxidised ore and is used as a feed for crude steel production in electric arc furnaces and at induction furnaces.

“I am not sure the recent rise in finished steel prices by some is going to influence sponge iron prices as the ore grades we are getting are inferior,” said R S Kejriwal, owner of Rexon Strips, a sponge iron maker.

Many large miners in Odisha have reached their production cap for the financial year. Hence, the sponge iron producers are being supplied old raw material filled with impurities, he said.

The sponge iron rates are likely to remain in a tight range also because of the fall in pellet prices, producers said.

Pellet prices have witnessed a price drop of Rs 500 a tonne to Rs 6,000.

The drop in demand for sponge iron and pellet prices has led to a cut in ore prices by miners. At Barbil market, Rungta Mines had earlier this week cut prices Rs 200 a tonne to Rs 6,600 for 62-grade lumps.