Leading state-owned steelmaker Steel Authority of India Ltd. (SAIL) has clocked over 50,000 t of pig iron (steel grade) sales through e-auctions in Oct’20 – the highest so far in one month recorded by the integrated steel producer.
Since the launch of the e-auctions in June’20, SAIL has booked close to 175,000 t of steel grade pig iron from its Bokaro, Rourkela, Bhilai, Burnpur and other plants.
Previously, with the exception of Rourkela Steel Plant (RSP), the other units of SAIL used to conduct sales through their respective branch sales offices at a fixed price, with a rebate for buyers booking significantly high volumes.
Merchant pig iron production slumped during the Apr-Jun’20 quarter on account of the pandemic-induced lockdown and SAIL had to shift focus to the export markets to stay afloat.
However, with the gradual revival of manufacturing momentum, domestic production and demand are rising since Jun’20. Realisations have turned in favour of domestic producers and SAIL has emerged as a major player in the merchant pig iron market.
Prices firming up
SteelMint reported that at the latest round of auctions from RSP on 6thNov’20, a total of 5,800 t of pig iron was booked at a weighted average price of INR 28,800/t – close to INR 1,000/t higher from the INR 27,810/t for 4,950 t of material booked at the previous auction on 28thOct’20.
SteelMint assessed the price of pig iron (steel grade) at INR 30,600 t (ex-works Durgapur) on 6thNov’20 – up from INR 29,500/t a week earlier.
Almost all integrated producers have hiked steel prices and SAIL is no exception. HRC prices were assessed at INR 44,500/t (2.5-8 mm, exy-Mumbai) by SteelMint on 7thNov’20 – higher by INR 1,500/t compared to a week earlier. CRC, galvanized steel prices too are on the ascendant.
Coupled with this, tight availability of pig iron in the merchant market and a challenging raw materials scenario are supporting prices further. Amid iron ore supply squeeze in Odisha, India’s biggest miner NMDC has raised prices of iron ore by INR 150-170/t this month. Merchant miners such as AdityaBirla-owned Essel Mining have raised prices by as much as INR 700/t last week.
So, we deduce that stiff raw materials and product prices are pushing pig iron prices at the moment.
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