India: Pig iron prices rise amid supply constraints, firm finished steel demand

• Merchant supplies tight as key producers raise captive consumption
• Higher iron ore and met coke prices, scrap shortage pushing up pig iron tags

The domestic pig iron market witnessed an upward trend in February 2025 due to a combination of factors that include supply shortages and increased finished steel demand, as per BigMint’s assessment.

Prices in Durgapur, a major hub, increased by INR 1,200/t from INR 33,000/t to INR 34,200/t supported by a shortage of imported scrap and rising input costs.

Meanwhile, major producers such as KIC Metalliks and Visa Steel have shut down operations due to low realisations and weak prices, further tightening supply.

Additionally, few major producers of Jharkhand and West Bengal have also reduced their merchant supply by around 50 % in the spot market.

Scrap prices have surged, and finished steel sales have improved, creating a bullish outlook for pig iron. With no selling pressure from mills and a persistent supply deficit, prices are expected to remain firm.

Auction results:

Evonith auction: On 1 March, Evonith Steel successfully auctioned 4,000 t of pig iron in Raipur at INR 35,100-35,500/t DAP. This has supported a price increase of INR 500-1,000 in the region.

SAIL auctions:
Bokaro Steel Plant (BSL): 17,500 t of pig iron were fully booked at INR 30,700/t.
Bhilai Steel Plant (BSP): 1,500 t were booked at INR 32,600/t.

Export update
On 14 February, Vedanta exported 28,500 t of pig iron to Bangladesh on FOB basis. This indicates stable export demand, which could provide further price support in the coming months.

Market trends

Supply constraints push up prices: Shutdowns at Visa and KIC reducing sales, have led to material shortages, pushing up prices.
Iron ore cost pressure: OMC has increased iron ore prices, adding further cost pressure on pig iron producers.
Scrap shortages boost pig iron demand: With limited availability of scrap, mills are turning to pig iron as an alternative, further driving prices upward.

Outlook
The near-term outlook remains bullish. Transactions are happening at INR 35,000/t in Durgapur, with expectations of sustained price levels due to strong finished steel demand and limited supply.
The market remains positive, with no selling pressure from mills, a stable increase in finished steel sales, and ongoing scrap shortages. With these factors at play, pig iron prices are expected to rise further in the coming weeks.