Indian Pig iron export offers witnessed a fall of 22% this quarter amid weak global demand and currency fluctuation.
Sharp fall in global Iron ore & Steel prices in last one year have resulted into huge price cut in global Pig iron offers. CIS nations & Brazil, who are the major suppliers of Pig iron in the world, underwent significant price cuts of around USD 150/MT in last six months.
Russia, which was suffering from economy crisis (particularly for last six months), smartly grabbed the opportunity of exporting Pig iron at cheaper rates while its currency depreciated over 50%. This was very well supported by cheaper Iron ore in global market (traded at a 6 year low) resulting in lower cost of production. Thus, Russian manufacturers got liberty to export Pig iron at much cheaper rates.
[su_pullquote align=”right”][su_note note_color=”#c2d6e9″ text_color=”#0b0a0a”]Currently, Iron ore (Fe 62) is traded at a six year low at USD 55/MT CNF China. [/su_note][/su_pullquote]
Currently Pig iron offers in Russia (& CIS nations) are at USD 245/MT FoB Black sea which was around USD 335-345/MT a quarter back. Similarly, Brazil followed the price suit and witnessed a downfall of USD 100/MT to USD 275-280/MT FoB Brazil port (Q-o-Q).
Offers in India also fell with the same velocity as Black sea. The offers dropped by around USD 80/MT in a quarter. Today the prices are at around USD 255-260/MT FoB India.
However, market participants and analysts are anticipating that Pig iron prices may gain stability. People have been anticipating the same since when the offers for Scrap (which is considered as Pig iron’s perfect substitute) stabilized. Currently Scrap (HMS 80:20) offers to India are strong and stable at USD 275-280/MT CFR India.
Snapshot of Indian Exports
RINL, one of the largest Indian Pig iron exporter on 17 Mar’15 received bids of around USD 255/MT FoB Vizag from Prime Carbon GmbH for 30,000 MT Pig iron. Though it is not confirmed by the officials, the company seems to be positive towards the deal. Its last tender (Feb’15) for Pig iron received bids around USD 263/MT FoB Vizag, which it denied.
Another active exporter in India is heard to have settled the deal for 27,500 MT at USD 260/MT FoB India. The shipment has been discharged for Malaysia on 21 Mar’15.
Meanwhile a vessel of 30,000 MT Pig iron is at berth with loading in progress. The vessel is expected to reach Jubail, Saudi Arabia by the 2nd week of April.
An export tender of 40,000 MT announced by MMTC (NINL) is about to expire on 6 Apr’15. Though the company’s last two export tenders failed, as per SteelMint analysis, market looks slightly positive in near term on the back of seasonal demand; hence the company might receive positive response.
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