Ferrous scrap and sponge iron prices rose on Thursday after taking a breather on Wednesday. Most mills believe a fall in input cost seems unlikely in the times to come and only a revival of steel demand will help them sustain production levels.
In Ludhiana, the bi-weekly Davis Indexes for HMS 1&2 (80:20) and sponge iron rose by Rs500/mt ($6.6/mt) to Rs24,500/mt ($327.35/mt) and Rs350/mt to Rs23,700/mt del mill from Tuesday, respectively.
In Jaipur, the bi-weekly index for sponge remained unchanged at Rs22,550/mt del mill and the index for HMS 1&2 (80:20) increased by Rs650/mt to Rs24,000/mt del mill. The supply of raw material, especially sponge iron, continued to remain short.
Mills rued that many sponge iron makers have reduced production amid tight iron ore supply in India. The wet season has made it difficult for miners to operate in most parts of the country. Adding to their woes is the fact that new management is yet to take charge after the fresh auctions conducted during the end of the fiscal year 2020.
The daily indexes for HMS 1&2 (80:20) rose by Rs500/mt to settle at Rs24,000/mt del Mumbai mill and by Rs800/mt to Rs23,200/mt del Mandi Gobindgarh mill. The index for sponge iron in Mumbai rose by Rs500/mt del mill to Rs21,500/mt delivered mill and the index in Mandi Gobindgarh increased by Rs300/mt to Rs22,300/mt del mill.
In Chennai, however, the bi-weekly index for HMS 1&2 (80:20) dropped by Rs100/mt to Rs22,150/mt delivered mill, but the index for sponge iron rose by Rs150/mt to Rs19,500/mt delivered mill. Trades in the city have dipped as mills hold enough inventories for their present production requirements.
($1=Rs74.84)