Neelachal Ispat Nigam Limited (NINL), a state controlled and India's largest producer and exporter of Pig iron since 2004-2005, has raised offers by Rs 1,250/MT for domestic buyers.
In FY 13, India produced 6.099 million tonnes of Pig iron, up by 13.6% Y-o-Y and NINL's share was 483,118 tonnes (8%) of India's total output. NINL's Pig iron production in FY 13 dropped by 7.6% Y-o-Y.
The rise in NINL's steel and foundry grade Pig iron prices is market driven and the increase in cost of producing Pig iron has been reflected on the selling price.
NINL procures 100% coking coal, which accounts for about 80% of the total cost of making Pig iron, from international market and the depreciated Rupee at 67 level against US dollar, has hit imports to a large extent.
It sources its Pig iron making raw material i.e. calibrated lump ore from OMC, NMDC and other Odisha based miners, prices of which are on the higher side.
NINL's Pig iron prices w.e.f Sep 04
Grade Si% Price (Rs/MT)
N1 Up to 1.24 22,750 (+250)
N2 1.25-1.79 23,200 (+1,250)
N3 1.8-2.2 23,750 (+1,250)
(Basic Prices; Ex NINL Plant basis)
Prices valid till September 13
N1 (steel) – mostly used for export purpose
N2 (steel) & N3 (foundry) – for Road dispatches only
NINL's Pig iron price rise might not be the driving force of Indian Pig iron industry in the present day, as its production is on the lower side due to limited quantity of raw material available. The current stock position is around 20,000 tonnes only.
Also, secondary Pig iron industry has already increased offers by around Rs 2,000/MT in the last one week, as plants were running at huge losses and had an only option left i.e. to hold Pig iron production.
NINL's total installed capacity for Pig iron production is 0.85 MnTPA and it intends to produce only 0.4 MnT in FY 14.
In Q1 FY 14, the total Pig iron output stood at 130,716 tonnes i.e. April 59,541 tonnes, May 59,541 tonnes and June 29,963 tonnes.
Its Pig iron output is expected to decline in the subsequent years as it is likely to produce 1.1 MnT of Billet in the current financial year.
It earlier used to manufacture 65,000 tonnes of Pig iron every month, which has come down to 40,000 tonnes in the recent past.
The export market is quite favorable for NINL as Rupee is still weak against US dollar and traders are waiting to participate in Indian Pig iron export tender, as international Pig iron prices have gone up by US$5/MT after about a month's time.
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