By Abhishek SonkarNew Delhi, Jan 7 (PTI) The rising prices of iron ore inpast two-three months has pushed up sponge iron rates by 25per cent to Rs 24,000 a tonne, an industry body said whileseeking immediate government intervention.
Iron ore is one of the main raw materials used to producesponge iron. The other is non-coking coal.
"Sponge iron in West Bengal, Chhattisgarh and Odishawhere most of the sponge iron plants are located, is tradingat Rs 24,000 per tonne, which is a rise of almost 25 per centcompared to the prices at which the commodity was being soldtwo-three months back," Executive Director of Sponge IronManufacturers Association (SIMA) Deependra Kashiva told PTI.
He was explaining what has been the impact of iron oreprice raised by state-owned NMDC.
On January 2 this year, the country's largest iron oreminer NMDC raised prices of higher grade iron lumps and finesby Rs 500 each to Rs 3,100 and Rs 2,760 per tonne,respectively, for the current month.
The price hike in January is the third-straight risesince November 2017 when NMDC had fixed the rates of lump oreat Rs 2,300 a tonne and that of fines at Rs 2,060 a tonne. InDecember, it raised the price of lump ore by Rs 300 a tonne toRs 2,600 and fines by 200 to Rs 2,260 a tonne.
Sponge iron is used in producing semi finished steelitems, ingots and billets, which are further used to makevarious finished steel items.
Ingots and billets, made from sponge iron and scrap, areraw materials for making angles, structural and TMT used asconstruction material, Kashiva said, adding that thegovernment must come forward to tackle the situation asindustry is bound to pass on the higher input cost to theimmediate member in the business chain.
Besides high prices, there is also shortage in supply ofiron ore, which is pushing up sponge iron prices. Due to this,induction furnace industry, which produces ingots and billets,has increased rates and from them rolling mills are buyingand selling TMT on higher rates, he explained.
Various construction activity is going in the society.
People are making their 'dream homes'. Middle class person isthe one who will bear the burden of this price rise, he added.
It will also hit small players who produce items likebolts, nuts, nails etc. It will affect their working capital.
The big player like JSW Steel has also expressed the sameview earlier this week.
Its Chairman Sajjan Jindal took to twitter to say that ahike in iron ore prices by NMDC has left steel companies withno choice but to pass on the increased production cost tocustomers.
"Recent increase in iron-ore price by state owned NMDC &Orissa private miners is forcing steel companies to pass onincreased cost of production," Jindal said in the tweet.
The increased cost of other raw materials like coal,refractory, electrodes is further fuelling this and leaving noother option, he added.
Referring to the recent orders due to which miningactivities have been stopped at some places, Kashiva saidproduction needs to be raised in mineral-rich states likeOdisha, where there is iron ore in abundance.
The government must jump into action to check risingprices of raw materials, he added. PTI ABIBAL.
This is unedited, unformatted feed from the Press Trust of India wire.