Sponge iron manufacturers in Odisha are unable to utilize their installed capacities amid weak demand from primary and secondary steelmakers. Steel plants in the state are running at less than 60pc capacity due to subdued market demand. Odisha has 2mn mt installed capacity for steel production.
Despite the relaxation of the lockdown for steel and it’s allied industries, sponge iron plants and secondary steel manufacturers are struggling with an acute shortage of workforce to run their operations at normal levels. The state has more than 100 sponge iron mills, and around half of them are financially challenged.
Prices of finished steel products and semi-finished steel in the region were flat or down during the week. In Raipur, the daily Davis Index for rebar settled flat at Rs32,700/mt ($429.58/mt) ex-works while the index for billet fell by Rs300/mt ($3.94/mt) and settled at Rs27,600/mt ($362.58/mt) ex-works.
Ahead of monsoon, steel mills have already piled up raw material inventories, hence the demand for sponge iron is subdued across India, as per Davis source. In Bhubaneshwar, the daily Davis Index for sponge iron Thursday dropped by Rs500/mt and settled at Rs15,000/mt ($197/mt) delivered mills.