Sponge iron prices flare up Rs 1500/t

The recent spurt in hot-rolled steel coil prices has encouraged sponge iron producers to hike prices by Rs 1,500 per tonne to around Rs 12,000.

Domestic sponge iron majors Jindal Steel & Power, Monnet Ispat, Vikram Ispat, Tata Sponge & Iron have hiked prices last week.

Prices of steel ingots have also increased in the last few days to around Rs 20,000-21,000 a tonne.

Confirming the price hike, senior executives at Monnet Ispat said, "Sponge iron prices have been on the rise mainly due to the continued increase in demand. Since steel prices have been increasing, the raw material prices are also bound to go up."

Monnet Ispat has an installed capacity of 3 lakh tonne per annum.

A sector analyst said, "Prices of scrap and coking coal have gone up sharply in the last two months because of global shortage. The shortage is likely to pull up the prices of steel and the raw materials further in the next few months at least."

With scrap exports from the United States reduced drastically after the levy of high export duties, and China having banned export of coke to protect its local hot-rolled coil makers, there has been a widespread shortage of inputs.

Another industry analyst said, "There is a tremendous shortage of scrap and coke in the global market because of export restrictions by the United States and China. This shortage is likely to push hot-rolled coil prices further up in the coming months."

Prices of hot-rolled coils in the global markets have increased by more than $150 per tonne since January this year and are now in the range of $560-$570 per tonne.

Domestic steel majors have also increased prices citing the reason of high raw material prices. Senior industry sources said they were expecting a continued rise in demand for sponge iron leading to higher prices.