Indian Pig Iron Prices Trending Lowest Of 2023, Further Fall Seems Limited

The Indian pig iron market has seen a continuous downtrend in prices since the beginning of February 2023, with the current prices being the lowest. Despite the initial upside following the removal of export duties in November 2022, weak domestic demand and sufficient supply have led to the current trend. However, the chances of further price corrections seem limited as export demand gradually improves and steel demand with primary mills is expected to increase, leading to limited supply in the domestic market.

Reasons For Price Corrections

According to industry experts, the downward pressure on pig iron prices can be attributed to two key factors- sufficient supply and weak domestic demand. While the removal of export duties initially led to a surge in export buying, weak demand has since put pressure on prices.

Additionally, the recent drop in coke and steel prices has led to a lack of buying confidence among major buyers, which has further contributed to price corrections.

Current Offers

• Steel-Grade Pig Iron- The latest offers for steel-grade pig iron through Durgapur-based mills are around Rs 41,000-41,500/ton ex-works, while in Raipur, it is being traded at around Rs 41,500-41,800/ton. These prices have dropped by Rs 1,000-1,500/ton week-on-week. In northern India, traders in Ludhiana (Punjab) are offering steel-grade pig iron at Rs 44,300-44,500/ton delivered.
• Foundry Grade Pig Iron- Offers for foundry grade pig iron reported at around Rs 46,300-46,500/ton in Ludhiana and about Rs 48,500-49,000/ton in Ahmedabad, delivered.

Future Prospects

While the current trend in the Indian pig iron market is downward, experts believe that the chances of further downward price corrections are limited. Export demand is expected to improve gradually with the surge in steel and scrap prices in global markets, and the increase in steel demand with primary mills is likely to lead to limited supply in the domestic market. Fresh export deals are also expected to limit further price corrections.

Insight 

The Indian pig iron market is currently trending lower, with the prices being the lowest of 2023. The key reasons for this trend are sufficient supply and weak domestic demand, with the decline in coke and steel prices of mid-sized mills also contributing to the price correction. However, the chances of further price corrections seem limited on resumptions in export demand with equivalent realizations compared to domestic offers.

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