Indian pig iron export offers rose by USD 5-10/MT on account of rising coking coal prices and limited supply from CIS region.
Current offers for steel grade pig iron are assessed at USD 320-325/MT FOB India east coast against last deal levels of USD 316/MT FOB.
Notably an export tender which closed last week is being re-negotiated and expected to conclude at around USD 10-12/MT higher from actual bids.
The main reasons for price surge are
1. Higher coking coal prices– Rising coking coal prices due to recent cyclone that hit Australia (largest exporter of coking coal) last week, has disrupted the supply. Prices have increased sharply from USD 150/MT FOB Australia to over USD 240/MT FOB Australia.
2. Limited supply from CIS region– There is limited supply from CIS based suppliers as most of them are booked for Apr’17. CIS is eventually one of the largest pig iron exporters in the world. There are no firm offers but price assessment for low phosphorous pig iron is around USD 350/MT FOB Black sea.
Outlook
1. Domestic pig iron prices may increase in short to medium term.
2. Upcoming Indian export tender will fetch higher bids.
3. Indian domestic mills will look for alternative of pig iron, which may increase demand of scrap and sponge iron.
Leave a Reply