Indian Pig Iron Market Witnesses Price Hike– These Are The Factors Behind It

The Indian Pig Iron market has been experiencing a price surge due to various factors, including the increase in the prices of substitute products such as Scrap and a surge in Steel prices.

The Pig Iron plants have kept their prices high due to the improvement in substitute products, resulting in good orders with suppliers. However, the participants reported to OfBusiness that there is less scope for further upsurge in prices.

Factors Supporting Pig Iron Market

• Triggered Scrap Market- The news of the stuck imported Scrap of UAE origin at Indian ports triggered the Indian Scrap prices by around Rs 1,500-2,000/ton (week-on-week), which led to the belief of Scrap shortage in the domestic market. This situation, combined with the surge in Steel prices, influenced Indian Pig Iron producers to keep their prices higher.

• Supply In East India- One of the private plants in Durgapur suddenly shut down due to a technical glitch in their furnace, resulting in a supply shortage in the spot market of Pig Iron of daily about 500-600 tons. Also, one of the Integrated plants based in West Bengal has stopped selling Pig Iron in the domestic market for a few days, due to an increase in in-house consumption. These events triggered the Pig Iron market.

• Fluctuating Coal Prices- The imported coking coal price, which fell sharply during April 2023, has now started fluctuating. The current price stands at around $250/ton CFR India of Australian premium coal. These prices fell by $5-10/ton, week-on-week, against a surge of around $15/ton during the previous week.

• Exports- As per sources report, one of the largest Steel producers in India is shipping their recent Pig Iron export deal of around 50,000-55,000 tons. This news has turned trends positive, ultimately causing the prices of Pig Iron in the domestic market to rise accordingly.

Current Prices

• Steel-Grade Pig Iron- The latest offers through Durgapur-based mills for Steel-grade Pig Iron are reported to be around Rs 43,000-43,500/ton ex-works in east India, while in central India’s Raipur market, the prices stand around Rs 42,800-43,000/ton. These prices have increased by Rs 1,000/ton in Durgapur and Rs 500/ton in Raipur against the previous week’s offers.

• Foundry Grade Pig Iron- For Foundry grade Pig Iron, the prices have slightly changed by Rs 100-300/ton week-on-week, with current offers ranging from Rs 45,000-45,500/ton in Ludhiana, Rs 45,500-46,000/ton in Delhi, and Rs 47,500-48,000/ton in Ahmedabad on a delivered basis.

Will Prices Rise Further?

Industry experts believe that the current rise in Pig Iron prices is due to a surge in Steel prices and a slight shortage in the eastern region, which seems to be temporary as one of the plants is expected to resume supply by the weekend. Also, since the price gap between Billets and Pig Iron is narrowed down to just about Rs 500-1,000/ton in the eastern region, there is less scope for further improvement in demand from the Ingot, and Billet manufacturers.

Considering these factors, the Pig Iron prices are expected to change according to the price movement of Steel, and there is less scope for significant improvement in the coming days.

OFB’s Insight

The Indian Pig Iron market has been experiencing a price surge due to various factors, including the increase in substitute product prices, short supply in eastern India, and fluctuating imported coking coal prices. While experts predict that there is less scope for significant improvement in the coming days, the market remains dynamic and may react according to Steel price movement and supply in the domestic market.

Read more: Secondary TMT Market In India Soars With Price Hike In Northern India- Find Out Why

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