Sadananda Mohapatra / Bhubaneswar Nov 01, 2012
Business Standard
After marginally raising prices two weeks ago, sponge iron producers have been forced to roll back the price hike.
The producers had tried to increase prices following a short rise in global iron ore prices, but as buyers shied away from the secondary steel commodity due to poor demand, they had to slash prices.
“The price rise could not sustain as the demand for sponge iron is too weak these days. At a time when induction furnaces are struggling to run their units, how can the prices go up?’ asked Pramod Singh, sales manager of New Delhi-based Viraj Steel.
Sponge iron produced by the secondary steel product is currently quoted at Rs 20,400 a tonne at the main hub, Rourkela, lower than Rs 20,800 a tonne two weeks ago. In Raipur, too, prices have come down by Rs 400 a tonne in the past 15 days to trade at Rs 20,800.
“In the past three months, we have not seen any major spike in sponge iron rates, as demand from the finished steel products are poor. The recent hike was based without any market support and had to fall,” said the senior official of a large listed sponge iron maker.
Induction furnaces consume sponge iron along with coal to produce long and flat steel products. Iron ore is an important raw material for producing this commodity.
Several sponge iron units are currently running at just 25 per cent capacity for the past few months, due to lack of demand. The makers had hiked the prices anticipating better demand because of a fall in production.
Business Standard
After marginally raising prices two weeks ago, sponge iron producers have been forced to roll back the price hike.
The producers had tried to increase prices following a short rise in global iron ore prices, but as buyers shied away from the secondary steel commodity due to poor demand, they had to slash prices.
“The price rise could not sustain as the demand for sponge iron is too weak these days. At a time when induction furnaces are struggling to run their units, how can the prices go up?’ asked Pramod Singh, sales manager of New Delhi-based Viraj Steel.
Sponge iron produced by the secondary steel product is currently quoted at Rs 20,400 a tonne at the main hub, Rourkela, lower than Rs 20,800 a tonne two weeks ago. In Raipur, too, prices have come down by Rs 400 a tonne in the past 15 days to trade at Rs 20,800.
“In the past three months, we have not seen any major spike in sponge iron rates, as demand from the finished steel products are poor. The recent hike was based without any market support and had to fall,” said the senior official of a large listed sponge iron maker.
Induction furnaces consume sponge iron along with coal to produce long and flat steel products. Iron ore is an important raw material for producing this commodity.
Several sponge iron units are currently running at just 25 per cent capacity for the past few months, due to lack of demand. The makers had hiked the prices anticipating better demand because of a fall in production.
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