Steel grade Pig iron producers in Indian market are facing a very tough time in the present day.
Prices have touched very low levels and do have further room for correction.
Current offers are standing in the range of Rs 22,200-300/MT (ex works Cuttack), down Rs 400/MT in the eastern region of India.
“Even after offering Pig iron at such cheaper rates, we are unable to sell out the material in good quantities.
Cost of the most important raw material i.e. Iron ore lumps, has been stable and plants dependent on imported Coal are the worst hit.
Depreciating Rupee (at 59 levels) has made Coal imports non viable and raised the cost of production”, said manufacturers.
Plants are holding stock in good quantities as Tata Steel's cheaper Pooled iron through e-auction at Rs 19,300/MT (ex works Jamshedpur) continues to impact sales in Pig iron.
Neelachal Ispat Nigam Limited (NINL) is yet to open its domestic Pig iron prices and sales is on hold from the 13th of this month.
According to sources, the manufacturer is either utilizing Pig iron for Billet making or stocking the material regarding shipment of the same for exports deals that have been finalized.
Due to low demand also, NINL might have decided not to offer Pig iron in the last 10 days.
Falling trend in semi-finished prices and poor demand in finished steel products has not supported any upward movement in Pig iron offers. Whereas, impact of monsoon has been less. Any big correction will lead to closure of plants.
Shortage in Foundry grade Pig iron still exists, plants are either not having material to offer or have preferred to hold production due to quite poor demand.
Why would buyers prefer to take Steel grade Pig iron when Foundry grade is available at much lower prices. Adding some percentage of Ferro silicon helps to convert it to Foundry grade material.
For more details, contact
Seema Goenka
(seema@steelmint.com)
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