Integrated steel-maker SAIL has clocked record sales of over 100,000 t of (steel grade) pig iron through auctions in Dec’20. State-owned company’s Bhilai, Rourkela, Bokaro, Burnpur and Durgapur steel plants had sold 60,000 t of pig iron in Nov’20.
As per SteelMint data, in Dec’20 Bokaro Steel Plant posted sales figures of 42,750 t of pig iron followed by Bhilai and Rourkela steel plants at 27,300 t and 24,900 t respectively.
SteelMint had earlier reported that pig iron production by the integrated steel producer was happening at a rate of 1,000 tonnes per day (tpd). Earlier, the daily production limit was around 500-700 tpd, informed sources. With the gradual revival of manufacturing momentum, domestic production and demand are on a roll and steel prices at a record high. SAIL is getting a better price realisation in pig iron, sources told SteelMint.
Prices have inched up at recent SAIL auctions by INR 2,500/t-3,700/t compared to Nov’20. As per SteelMint data, Bhilai Steel Plant has achieved a price of INR 33,500/t in Dec’20 against 29,700/t in Nov’20.
SAIL has posted record Dec’20 sales at a time when merchant pig iron supply is at a premium, with major producer Vedanta Limited banking a blast furnace of 1,300-1,400 tpd capacity which will resume production not before Jan’21. Other producers too have announced periodic maintenance shutdowns.
SteelMint estimates that production shortfall of foundry grade pig iron is approximately 2,000 tpd, while that of the steel grade material is 600-700 tpd.
Supply shortfall had paved the way for SAIL to post over 115,000 t of pig iron sales in the merchant market in Oct-Nov’20.As assessed by SteelMint, current prices stand at INR 35,400-600/t (DAP Raipur) and 35,500-700/t (DAP Durgapur).
According to sources, prices are expected to remain strong during the first half of Jan’21 on account of supply shortage coupled with rising steel and ferrous scrap prices globally. And prices are likely to stay firm until global scrap supply normalises.
“Indian secondary manufacturers have been impacted by stiff raw materials prices which have affected capacity utilisation. Considering the current crunch in domestic pig iron supply, it doesn’t look like pig iron prices are going to correct downwards anytime soon,” a market participant informed SteelMint.
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