Sponge iron prices zoom 25%, pig iron up 17% on hike in ore and coal rates

Unlike integrated steel plants which use iron ore fines, pellets and lumps to produce steel, sponge iron makers in India mostly use ore lumps in their Direct-Reduced Iron (DRI) furnaces

The price of steel making intermediaries such as sponge iron and pig iron have seen a sharp upward swing after a recent spurt in rates of iron ore and coal, two key inputs for these products.

Sponge iron and pig iron are mostly converted to steel in electric arc or induction furnaces. This accounts for nearly 45 per cent of the country’s total steel production.

According to trade sources, between November and now, sponge iron prices have increased up by 25 per cent. The rate ex-Durgapur rules at Rs 22,500 a tonne, compared to Rs 18,000 two months earlier. The