Indian Pig Iron Prices Move Down Further On Weak Demand

Pig iron prices of private mills continue to move down further following decline in domestic billet & scrap prices.

The rigorous fall in billet prices led buyers to look for low cost substitute products i.e. melting scrap and cast iron in order to reduce their input cost. This has weakened the demand of pig iron, sources informed.

The average price of HMS (80:20) scrap in domestic market is hovering at INR 24,000-24,500/MT ex-works in central & eastern India, while pig iron offers are evaluated at INR 27,500-27,800/MT ex-Durgapur & INR 28,500-28,700/MT ex-Raipur. Thus, with competitive scrap prices the buyers are holding back pig iron bookings.

In addition, falling price gap between pig iron & billet is another major reason that has slowed down the purchase of pig iron. The current price gap between pig iron & billet in Raipur is at INR 500-600/MT, while in Durgapur it stands at INR 1,300-1,500/MT. Meanwhile, as per industry experts, the price gap between these two should be not less than INR 2,000/MT.

Hence, considering these factors, the sources are estimating that if the billet demand continues to remain weak, the selling pressure among pig iron producers may rise which would ultimately result to further fall in prices in the coming days.

As per weekly comparison, steel grade pig iron prices in India dropped by INR 300-500/MT (USD 4-7) and the fresh offers are mentioned below:

— Neo Metaliks in Durgapur reported small deals at close to INR 28,000/MT yesterday and the today offers stand at INR 27,800-28,000/MT; ex-plant.

— Jindal Steel in Raigarh is offering steel grade material at INR 28,800/MT ex-plant, however, buying remained limited, as assessed in conversation.

— Raipur based manufacturer has kept pig iron prices stable at INR 28,700/MT ex-plant, however, offers through traders learned at INR 28,600-28,800/MT FoR basis.

— Jharkhand based manufacturer is offering discount of INR 200-300/MT on bulk purchase of 500-1,000 MT steel grade pig iron as against base price of around INR 27,800/MT ex-plant.