Sponge iron prices have declined around 26% in the last one year, Subhendu Bhattacharjee, Secretary, West Bengal Sponge Iron Manufacturers Association, told ISMW.
While prices of sponge iron were at Rs 16,000-Rs 17,000 per ton in March 2015, offers currently stand at Rs 12,200 per ton in the eastern region, Bhattacharjee said.
Though prices of the main raw materials of sponge iron, namely iron ore and coal, have declined the net decline in the prices of sponge iron was substantial.
According to Bhattacharjee, iron ore prices were at Rs 4,000 per ton in March 2015 but reduced to Rs 2,000 per ton in March 2016. Similarly, prices of certain grades of coal declined to Rs 5,600 per ton in March 2016 from Rs 6,200 per ton in March 2015.
“The main problem for the 62 sponge iron units in Bengal is lack of demand. Prices of TMT bars have gone down substantially and that has affected the sponge iron industry,” Bhattacharjee said.
Capacity utilisation of the sponge iron units has fallen to only 7,000 tons per day from the previous 16,000 tons per day.