MUMBAI: Steel ingot prices have moved up by close to Rs 1,000 in the futures market with hardening of iron ore and coal prices.
Ingot price rose from Rs 22,490 a tonne, in the first week of December, to Rs 23,430 in the January contract.
Iron ore prices, which moved up by over $25 per tonne in the past one month, have seen record high levels recently. Prices have steadily moved up from $140 a tonne levels in August ‘07 to current levels. In the domestic market, it is priced around Rs 3,000 per tonne currently.
Iron ore is used in both primary and secondary manufacturing of steel. It is the main raw material for sponge iron, which is used to make steel ingots. A shortage in sponge iron is therefore causing steel ingot price to rise.
Association of Secondary Steel Manufacturers president JK Arora said: “The National Mineral Development Corporation recently raised iron ore prices, making it more expensive for domestic consumers.”
National Mineral Development Corporation has raised prices of iron ore fines sold under long-term contract to domestic clients by 47.5%, in the end of December. However, this does not apply to the international contracts. Most of the long-term contracts are for a five-year period. Mr Arora pointed out that exorbitant prices could hamper exports.
Besides, sharp rise in coal prices due to scarcity, are adding to the pressure. The domestic demand for steel is picking up with the onset of the second harvest season of the year. “All of this is putting pressure on steel prices,” he said.
Steel ingot production had already slowed down, due to a shortage of both sponge iron scrap and iron ore. This is making production of ingots expensive. However, a stronger rupee will may support imports to an extent.
Ingot price rose from Rs 22,490 a tonne, in the first week of December, to Rs 23,430 in the January contract.
Iron ore prices, which moved up by over $25 per tonne in the past one month, have seen record high levels recently. Prices have steadily moved up from $140 a tonne levels in August ‘07 to current levels. In the domestic market, it is priced around Rs 3,000 per tonne currently.
Iron ore is used in both primary and secondary manufacturing of steel. It is the main raw material for sponge iron, which is used to make steel ingots. A shortage in sponge iron is therefore causing steel ingot price to rise.
Association of Secondary Steel Manufacturers president JK Arora said: “The National Mineral Development Corporation recently raised iron ore prices, making it more expensive for domestic consumers.”
National Mineral Development Corporation has raised prices of iron ore fines sold under long-term contract to domestic clients by 47.5%, in the end of December. However, this does not apply to the international contracts. Most of the long-term contracts are for a five-year period. Mr Arora pointed out that exorbitant prices could hamper exports.
Besides, sharp rise in coal prices due to scarcity, are adding to the pressure. The domestic demand for steel is picking up with the onset of the second harvest season of the year. “All of this is putting pressure on steel prices,” he said.
Steel ingot production had already slowed down, due to a shortage of both sponge iron scrap and iron ore. This is making production of ingots expensive. However, a stronger rupee will may support imports to an extent.
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