Indian merchant pig iron producers are increasing their domestic prices due to high coking coal prices and falling imports of scrap in last few months.
SteelMint’s weekly pig iron assessment for steel grade has moved up on the week at INR 17,700/MT ex-Cuttack, Odisha. Which is one of the largest merchant pig iron producing regions in the country. Offers at other parts of India are assessed at INR 21,000-21,500/MT (Ex- Raipur), INR 20,500/MT (Ex-Durgapur) & INR 21,000/MT (Ex-Hyderabad).
Pig iron prices in domestic and global market have gone up largely due to sharp increase in seaborne coking coal prices, which are currently being offered at USD 210/MT FOB Australia, against USD 115/MT FOB a month back.
There are mixed response in Indian domestic market over sustainability of pig iron prices which are nearing to billet prices. For instance, pig iron prices in Raipur are at INR 21,000-21,500/MT whereas billet prices are at INR 21,600/MT (ex-works).
Pig iron producers stated that there is limited scope for pig iron prices to fall given the current high coking coal prices. Manufacturers also mentioned that domestic pig iron prices are also supported by global demand. Recent Indian export tender of 30,000 MT fetched highest bid at USD 247/MT (INR 16,300) FOB India, but company did not award it owing to higher prices in domestic market.
What can we infer from this ?
1. We can infer that domestic pig iron prices should sustain at these prices over high production cost. Also, steel producers have increased their crude steel production and are selling less Pig iron in the domestic market.
2. Scrap imports may pick up in coming weeks looking at price disparity between Pig iron and scrap.
3. Indian steel furnaces may look for alternatives like Calcined Petroleum Coke (CPC) in order to maintain the cost of production.
Trade-wise:
1. In Raipur, Jayaswal Neco Industries has kept sales closed for the material due to increased captive consumption and less production. The plants last offer for local buyers is heard at INR 21,000/MT.
2. In Raigarh, Jindal Steels is only offering pig iron and another producer Monnet Ispat has kept sales closed due to maintenance work in their blast furnance.
3. Kajaria Iron Castings (KIC) & Neo Metaliks in Durgapur are also offering limited quantity. Today, the plants offers reached to INR 20,500/MT. According to traders in the same place, Electro Steel is offering same grade material in the range of INR 20,300-20,500/MT FoR Durgapur. Durgapur Billet prices are at INR 21000-21,500/MT.
4. In Odisha, there are no fresh tenders by RSP (Rourkela) steel plant yet . Another small manufacturer in the state is also not offering material as they are in wait and watch for NINL fresh price declaration.
5. Tata Steel’s ferro shots offers during last week were at INR 18,000-18,500/MT. According to the sources, they have recently increased Pooled iron offers by INR 500/MT to INR 17,000/MT ex-plant.
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