Indian domestic pig iron prices have corrected by INR 1,500-2,500/MT (USD 22-38) in last one month. Industry participants are assuming further fall in prices.
Factors that will determine prices are – lull export deals, softened global coking coal prices & Increase domestic pig iron supply amid less sales.
Lull export deals: With sharp fall in seaborne pig iron offers from CIS region, purchase interests by international buyers are less for Indian cargo. Buyers are looking for Indian cargo at around USD 290/MT FOB level, however sellers are unwilling to sell it below USD 300/MT. Notably India exports is about 1,75,000 MT annually in FY17.
Recent tenders by Vizag Steel and MMTC got cancelled and have been re-issued by both the companies. If situation remains same manufacturers may be forced to cut prices in domestic market.
Softened Global Coking coal Prices: Coking Coal prices are coming down due to significant rise in Supply. Current, Premium HCC offers are at around USD 172-173/MT CFR India, which was at USD 183-185 during beginning of Feb’17 & USD 230-232/MT in the first week of Jan’17. The prices are sharply falling on the wake of increase production in Chinese mills, resume export from USA to China & resume mining operations in Canada, Australia & Mozambique which was suspended during 2nd quarter of 2016.
Increase domestic supply: In conversation with market participants , SteelMint has analyzed that suppliers for the material has increased in a month duration. Few manufacturers in Durgapur namely KIC (Kajaria Iron Company) & Jai Balaji has resume their operations which was halted during Nov-Dec’17 due to higher coking coal prices and cheaper selling prices of pig iron.
Similarly, in Central India, where renowned manufacturers are offering more quantity currently. The supply from Odisha based NINL & Tata Steel has resumed fully which were limited during Dec’16-Jan’17.
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