India: SAIL’s pig iron sales in open market drop to less than 60,000 t in Jan’21

PSU steel-maker Steel Authority of India Ltd. (SAIL) sold a little less than 60,000 t of (steel grade) pig iron at periodic auctions in Jan’21, SteelMint data shows. Sales slumped by nearly 50% compared to the over 100,000 t of record pig iron sales via auctions that SAIL’s Bhilai, Rourkela, Bokaro, Burnpur and Durgapur steel plants conducted in Dec’20.

While Bhilai Steel Plant recorded sales of 16,900 t in Jan’21 vis-à-vis 27,300 t in Dec’20, sales by Bokaro Steel Plant in Jharkhand dropped to 11,400 t compared to 42,750 t in the preceding month. Similarly, Rourkela and Burnpur Steel Plants posted decline in sales.

Sharp fall in bids
As per SteelMint reports, bids at SAIL’s pig iron auctions have fallen sharply of late: bids plummeted by INR 2,850/t ($39) against the previous auction at RSP on 30 Jan’21 for 5,400 t of basic grade material , while at Burnpur Steel Plant’s auction on 28 Jan’21 bids dropped by INR 1,800/t ($24).

Month-wise weighted average prices for Bhilai and Rourkela steel plants stand at INR 33,900/t and 33,650/t respectively – range bound compared to Dec’20 prices. SteelMint’s assessment for steel grade pig iron (ex-works Durgapur) stands at INR 31,800/t – down INR 2,000/t on week.

Domestic prices plunge
Prices at SAIL’s pig iron auctions remain under pressure on account of weak domestic secondary steel prices, SteelMint notes. SteelMint’s billet index (100×100 mm, ex-works Raipur) is assessed at INR 33,500/t compared to 40,400/t in early-Jan’21. Likewise, domestic melting scrap prices, too, have dropped after sustained hikes on global cues in Dec’20 and Jan’21 and currently stand at INR 25,800/t (DAP at Mandi Gobindgarh) against INR 30,700/t a month ago.

Vedanta Resources, India’s largest foundry grade pig iron manufacturer, has relit its 1,500 tonnes per day blast furnace (BF) which was banked for maintenance in end-Nov’20. Pig iron demand was already subdued and with improved supplies prices may plunge further, sources informed SteelMint. Leading producer Tata Metaliks too has cut foundry grade pig iron prices by 5% in Jan’21 for the first time after successive hikes since Aug’20.
Supply shortfall had paved the way for SAIL to post over 115,000 t of pig iron sales in the merchant market in Oct-Nov’20 and over 100,000 t in Dec’20.