Despite the threat of mining ban on deemed leases by SC sponge iron levels corrected by INR 100 per MT to INR 300 per MT on falling demand. Strengthening INR v/s USD opens up scope of imported iron ore with global price levels dropping by almost 20% in the last three months.

However for the time being continuous slump in long steel demand owing to low construction activity during summer and power shortage has led to pile up of inventories at furnace owners end. Pencil Ingot price levels dipped by upto INR 600 per tonne signalling a break in the rising streak about 10 days back.

Recent drop of INR 200 per tonne by NMDC in lumps and roll over in other grades has helped assuage the sagging margins of sponge iron producers with the differential narrowing to merely INR upto 300 per tonne . This has given some breathing space to sponge iron manufacturers and the furnace owner to play for some more time before the feast begins.

It is expected that SC will come out with verdict on 17th May. However murmurs of ban becoming reality has led to hike in iron price levels in Orissa by INR 100 per tonne during the week as mills are expected to commence inventory built up before the curtains are drawn.

In long run however the price hike is expected to pan out with increased imports as international price levels remain on corrective course.