Indian pig iron prices have witnessed a downward trend since end-Oct’21, seeing a sharp correction by around 20% in this period.
SteelMint’s benchmark steel grade pig iron prices in West Bengal’s Durgapur corrected from INR 46,500/tonne (t) levels exw in mid-Oct’21 to INR 37,000/t in the first week of Dec’21.
However, with the news of resumption of export deals in the market, the Indian pig iron price trend has reversed.
Now, it is more likely that prices will not see any significant correction given the easing of selling pressure on Indian mills.It is also expected that prices may find some support in the near-term.
Factors likely to support pig iron prices
- Indian mills return to exports market
Recently, an Indian mill booked around 30,000 t of steel grade pig iron for exports at around $490/t FOB, SteelMint learned from sources.The ex-plant realisation of this deal price would be around INR 35,500/t.The vessel was heard booked for South Korea. A few more export deals are in the pipeline, SteelMint understands.
Another parcel for 40,000-50,000 t of steel grade pig iron, offered by a western India-based mill, is under negotiation for exports.
As per SteelMint data, India’s pig iron export volumes stood at 1.19 million tonnes(mn t) in Jan-Nov’21.
- Coal & coke prices firm up in India, China
Metallurgical (met) coke prices in India and China, the top steel producing countries, bounced back recently.
Indian domestic met coke prices have risen by INR 2,500-3,000/t w-o-w on 10 Dec’21, as per CoalMint’s assessment. Coke prices increased following a rebound in imported coking coal prices by 7% w-o-w.
Offers for 25-90 mm blast furnace (BF) grade met coke are currently heard at INR 38,500-40,000/t ($508-528/t) in eastern India, and at INR 40,000-41,000/t ($528-541/t) in the western region. Prices are exclusive of 5% GST.
Meanwhile, coke plants in China’s Inner Mongolia region hiked met coke prices by RMB 100-120/t ($16-19/t) on 6 Dec’21. However, buyers are largely showing reluctance to accept these increased rates amid softened pig iron prices and sluggish downstream demand for finished steel.
Earlier in November, met coke prices in China underwent successive rounds of declines, amounting to RMB 1,500/t ($235/t).
- Iron ore prices likely to remain supported on global uptrend
Indian domestic iron ore prices have been in a downtrend since end-Oct’21. However, these are expected to find support in the near-term on rising global prices. SteelMint’s Australian iron ore (Fe 62%) fines index increased by $5/t since end-November to $103/t CFR China.
Outlook
SteelMint expects the above factors to push Indian domestic pig iron prices upwards in the coming months.
Also, Korean mills are showing interest in shifting to the electric arc-furnace route of steel making and are, hence, gradually ramping up their pig iron imports, India could tap into this emerging opportunity.
It is, therefore, likely that pig iron export volumes from India could increase in the medium-to-long term.
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