Pig iron prices in Indian domestic market have increased further by INR 300-500/MT (USD 3-8) and have been highest in three years (40 months) as per SteelMint’s latest price assessment. The prices rallied in line with rising steel prices resulting strong demand and with significant surge in coal & scrap prices globally.
India, is one of the major producers and exporters for pig iron, produces about 9-10 MnT saleable pig iron, out of which 0.4-0.8 MnT is exported and rest being consumed by Indian domestic steel Industries.
The current offers in Indian domestic market for basic (steel) grade pig iron are assessed at INR 26,500-26,800/MT ex-Raipur – Central India, INR 26,000/MT in Durgapur – East region, INR 26,000-26,500/MT in Hyderabad – South India & INR 27,500-28,000/MT FoR Ludhiana – Northern India. The similar price ranges were last reported during July-mid 2014.
Factors which influence pig iron prices sky high –
Supply Shortage: The domestic supply is affected mainly due to NINL’s (Nelachal Ispat) blast furnace maintenance. Neelachal Ispat is India’s largest steel grade pig iron producer and exporter. And since the company halted productions, there has been a supply crunch leading to price gain.
Rally in Coking coal prices: Another important factor affecting pig iron prices are the continuously rising global Coking coal cost. The vital commodity has witnessed high demand and supply disruptions due to severe congestion at the Australian and Chinese port to stock up for winter holidays. During the holidays, there will be no mining activity, and hence no supply of coal.
Latest Australian Premium HCC offers are assessed at about USD 260/MT CNF India, increase about USD 50-60/MT in a month.
Sharp hike in Scrap & Sponge prices: The price rally continue in Indian Sponge iron & Scrap market which are the key substitutes of pig iron. In a month the price rose by INR 2,000-3,000/MT (USD 30-45).
At the same time imported scrap offer also moved up by USD 40-50/MT and stand at around USD 340/MT for HMS (80:20) Dubai origin, CFR India.
Increase exports: Indian pig iron market is supported by strong global demand in absence of Chinese cargo and due to rising global scrap and billet prices; resulting from strong demand for pig iron.
India’s major pig iron exporters – MMTC (on behalf of NINL), Vedanta Resources & RINL (Vizag Steel) have made healthy export deals in the previous months.
In recent, Vedanta resources has shipped couple of export vessel of 30,000 MT each during Nov & Dec 2017, respectively. Another shipment of 15,000 MT pig iron is in anchorage in Jaigarh port of Sona Alloys.
According to data maintained by SteelMint Statistics, India’s overall pig iron exports rose 3 times in 2017 (till Nov) and are recorded at 530,000 MT against at 170,000 MT in CY 2016 (Jan-Dec).
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