- Pig iron output sees marginal rise y-o-y
- Vedanta largest producer; but volumes drop y-o-y
- Domestic supplies improved on better margins
- Exports rise before and after duty imposition
India’s merchant pig iron production was recorded at 5.85million tonnes (mnt) in the last financial year 2023 (April 2022-March 2023), according to data maintained with SteelMint.
The production volume has gone up marginally by 2% y-o-y compared to 5.76 mnt recorded in the previous year (FY22).
Company-wise production
Vedanta was the largest producer at 0.70 mnt in the year under review. However, the volume dropped by 11% y-o-y compared to 0.79 mnt in FY22. Following this was JSPL at 0.57 mnt, up 14% y-o-y.
SAIL was the third largest producer at 0.37 mnt, down sharply by 33% y-o-y.
Tata Group was at fourth position at 0.12 mnt and JSW at fifth at 0.05 mnt.
Factors that led to higher production-
Increase in hot-metal production
India’s hot metal production stood at 80.87 mnt in FY23, up by 3.5% y-o-y compared to 78.12 mnt in FY22. The rise in hot metal production was in line with an increase in steel production.
JSW Steel was the largest producer at 20.07 mnt, followed by Tata Group at 19.82 mnt and SAIL at 19.41 mnt. JSPL stood at the fourth position at 6.18 mnt and RINL at fifth at 4.41 mnt.
The increase in the hot metal production has led to the rise in pig iron production.
Improved domestic supplies
Domestic pig iron supplies improved with the start of production by major steel pipes producer Welspun, and long steel producer Neelachal Ispat Nigam Limited (NINL) post-acquisition by Tata Steel. This added to the capacity of pig iron production.
In addition, JSW-owned Bhushan Steel and Power Limited (BSPL) had increased pig iron supplies in the domestic market through the auction process.
Where on the one hand, there was an increase in supplies, on the other, state-owned Steel Authority of India (SAIL) decreased its pig iron volumes offered in the auctions as it consumed the same in steel production.
Higher price realization 
Last year, many steel producers actively sold pig iron in the merchant market due to better realizations. Pig iron prices were on the rise in the late March-mid May period. These hit the highest level of INR 62,500/t exw-Durgapur in late-March.
It was observed that the price spread between pig iron and scrap in the domestic market widened during April-May.
Pig iron suppliers were getting good realizations in the export market too. After the Russia-Ukraine war erupted in February’22, there was a pig iron supply crunch in the global market due to sanctions on Russia, the largest pig iron exporter.
Indian mills grabbed this opportunity and started selling in the global market to fill in the demand-supply gap.
However, after the government announced export duty on 22 May, the volumes started falling and so did domestic prices.
India exported 0.55 mnt of pig iron in FY23, down sharply by 56% y-o-y compared to 1.247 mnt in FY22.
Exports picked up only after the duty was lifted in November. At the same time,there was good demand from USA also.
Outlook
It is expected that India’s pig iron production may remain either stable or inch down in the current fiscal year (FY24).
Some steel producers, who are now actively offering in the merchant market, have their new plants under construction. Once these plants commence operations,pig iron supply in the domestic market would decrease as mills would secure the same for captive consumption.
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