Indian Pig Iron Prices Changed On Subdued Demand, Higher Raw Material Prices

The Indian pig iron market has experienced a price change in a week due to volatile steel prices, subdued demand, and rising coal prices.

Steel-grade pig iron prices have increased by Rs 200-Rs 500/ton in a week, with a major rise in the central and northern regions, rising by Rs 300-500/ton in a week. The prices have recovered after hitting low levels in the mid of February 2023.

Current Offers

Today fresh offers for steel-grade pig iron through the Durgapur-based mills are reported at Rs 42,500-43,000/ton ex-works, while in Raipur, it is being offered at around Rs 42,300-42,500/ton.

In northern India, steel-grade pig iron offers through the traders in Ludhiana (Punjab) stood at Rs 45,000/ton and foundry grade at Rs 47,000-47,200/ton on a delivered basis.

Reasons For Price Rise

The increase in prices is attributed to the rallied steel prices of mid-sized (secondary) steel mills, which rose nearly Rs 1,000-2,500/ton in a week, supported by improved demand from end-users.

In addition, the rallied coal prices are another key factor that influenced pig iron producers to keep the price higher, even though the demand is below average for a few days.

Current offers for premium HCC Australian coking coal are hovering at $400-405/ton, which rose by $50-55/ton in February 2023, against $350-355/ton on 1 February 2023, CFR India.

The pig iron producers in Durgapur stated that they are keen on orders, but demand continued to weaken for a few days. Hence, due to weak demand, prices should drop, but due to higher coal and iron ore prices, they are unable to cut their offers.

Similar comments were received from the north India’s Punjab market, where traders believe that prices are supported due to coal prices, otherwise, there should be a decline in offers compared to demand.

Future Prospects

The pig iron manufacturers believe that prices should remain supported on account of higher raw material costs. Also, since the majority of buyers have put their purchases on hold, it should resume soon, and accordingly, the spot market will react.