India: Pig iron prices firm up in Feb’26 on rising met coke costs, auctions reflect improving sentiment

• Auction results indicate gradual market confidence
• Firm substitute prices support stronger pig iron prices

Pig iron prices moved moderately higher in February 2026, largely supported by rising raw material costs and firmer auction benchmarks. Steel-grade pig iron prices in the Durgapur market increased to around INR 38,300/t exw from INR 37,300/t in January, registering a m-o-m rise of about INR 1,000/t. Buying activity remained cautious during the month, with most participants continuing procurement on a need-based basis amid uneven downstream demand visibility.

The upward movement in pig iron prices was mainly driven by higher input costs. Met coke prices rose to nearly INR 34,700/t in February from around INR 33,000/t in January, marking an increase of about INR 1,700/t m-o-m. The rise followed a notable increase in international coking coal prices, which climbed to around $263/t CNF Paradip from $247/t in January, up $17/t. Higher coking coal costs increased production expenses for coke manufacturers, which subsequently pushed up met coke prices and provided cost support to pig iron producers.

Auction activity during February remained active, with around seven auctions conducted by NMDC and SAIL (BSP and RSP). NMDC largely maintained stable base prices across its auctions. The initial auctions witnessed healthy buyer participation and strong booking volumes, indicating positive early sentiment. However, buying interest slowed in later auctions, resulting in relatively lower booked quantities.

In contrast, SAIL’s BSP and RSP auctions were concluded at comparatively higher prices, with the entire offered quantities being booked. The stronger realisations and full bookings in SAIL auctions suggest better demand visibility and improved buyer confidence compared with earlier weeks.

Pig iron prices also found support from firm substitute metallic markets during February. Steel-grade pig iron in Durgapur averaged INR 38,300/t, while end cuttings stood at around INR 37,200/t and PDRI near INR 25,600/t. The pig iron-scrap spread narrowed to INR 1,000/t, compared with INR 1,600/t in January, indicating tighter arbitrage. Meanwhile, the pig iron-PDRI spread remained at INR 12,700/t, reflecting stable cost competitiveness against sponge iron. The relatively narrow differential with scrap limited substitution and helped sustain pig iron demand despite cautious buying activity.

Indian pig iron prices are likely to remain stable with a mildly positive bias in the near term. Firm raw material prices, particularly met coke and coking coal, are likely to continue supporting production costs. Additionally, escalating geopolitical tensions, especially the US-Israel-Iran conflict, could disrupt global coal trade flows and freight routes, potentially pushing up coking coal prices. Any sustained rise in coal and coke costs may lend further support to pig iron prices, although cautious buying behaviour and uneven downstream steel demand may still limit sharp upward movements across key markets.