Indian pig iron offers significantly moving downwards due to low exports and falling domestic steel prices. In fresh update, the domestic pig iron offers fell around INR 200-500/MT (W-o-W) as per SteelMint price assessment.
Earlier, there was anticipations that domestic pig iron prices to get support as the Neelachal Ispat has halted domestic sales due to maintenance works in blast furnace. Although, the price reacted opposite and it continue to downtrend.
SteelMint has tried to analyse the reasons behind falling domestic pig iron prices, below are the outcome:
Low exports orders: There is no fresh export deal by Indian government owned or private pig iron manufacturers for more than a month duration. The last export deal was concluded by MMTC on behalf of NINL during mid of Sept 2017 at USD 378-380/MT FOB India for 30,000 MT Pig iron. Although, the current offers by the private producers are heard at USD 340-350/MT but the buying interest reported near to USD 330/MT FOB India. Thus with falling export realizations, the manufacturers have to reduce their domestic offers too in line to attract buyers.
According to data managed by SteelMint stats, Indian bulk pig iron exports during Jun’17 was recorded at 70,000 MT which declined to 40,000 in Jul’17 & at 30,000 MT in Aug’17. Further, in Sept & Oct (till 16th) there is no bulk shipment being reported.
Decline Billet prices: With the start of monsoon domestic steel prices including billets are continue to downtrend which has narrowed down price gap between pig iron & billet and with the reduction of price gap, domestic steel mills have opted low cost substitutes like scrap, CPC & cast iron to reduce high input cost which in turn low demand for pig iron.
High inventories with stockiest: According to SteelMint analysis, there is huge stock of Pig iron with the stockiest/traders based in Central & North regions of India. So, the supply is enough despite hold domestic sales by NINL and since the billet prices started to decline the stockiest also prefer to deal at low prices in line to clear their high cost inventories.
Also, there is strong availability of Pooled iron & Granulated pig iron in domestic market. According to information with SteelMint the officials of Odisha based two large manufacturers it reported that monthly average production(supply) for pooled iron about 60,000-70,000 MT & for granulated pig iron nearly 30,000-40,000 MT, the quantity is total of both plants.
Trade Log –
1. SteelMint’s current week price assessment for steel grade pig iron in Raipur, Central India stood near INR 24,500/MT against last week at INR 24,500-24,800/MT; excluding GST.
2. Bokaro based one of the private producer kept local offers firm for steel grade at INR 22,500/MT ex-plant and buying interest reported near to INR 22,000/MT. Hence, the deals are not supported.
3. According to trade participants, Tata Metaliks has reduced offers during the last week for foundry grade pig iron to INR 27,500/MT against previous offers of INR 28,200/MT ex-plant, Kharagpur.
4. Offers almost remain firm for Granulated Pig iron at INR 22,500-23,000/MT & Pooled iron at INR 21,500-22,000/MT ex-works, Odisha.
5. Trade participants in North region – Ludhiana reported limited trades and offers for steel grade at INR 25,000-25,500/MT & for foundry grade at INR 28,000/MT FOR & excluding GST.
6. Bhushan Power & Steel is offering Steel grade pig iron at INR 23,000-23,500/MT ex-plant, the offers reduced around 500/MT against last offers of INR 23,750/MT, officials reported.
7. According to JPC report, India’s pig iron production increased by 3.1% in Sept’17 to 0.776 MnT compared with Aug’17 & Sept’16.
Leave a Reply